An Economist and Director of the Institute of Statistical, Social, and Economic Research (ISSER), Professor Peter Quartey is optimistic that Ghana’s economy will rebound strongly in the last quarter of the year.
With the economy already showing signs of recovery after a difficult second quarter, Prof Quartey is projecting a 3 percent growth in the last quarter.
He said the growth will be driven by the rebound of economic activities in the country, following the easing of the COVID 19 restrictions.
He, however, cautioned that this rebound will only be possible if the economy is well managed, and the country does not see a spike in the COVID-19 infections which may necessitate another restriction.
Speaking in an interview with The Vaultz news, Prof. Quartey said;
“Yes, I think so, it may even be around 3%. Even in the second quarter there were easing of restrictions and economic activities were returning to normal. And in the last quarter, we will see more activities, we are likely to see more activities granted that we manage our economy well. …and we don’t see another surge in infections”.
According to the ISSER boss, the current projections of the central bank are realistic. He even expects the Ghanaian economy to rebound much stronger than the central bank’s projections of economic expansion of between 2 to 2.5 % at the end of the year.
The Governor of the Bank of Ghana, Dr. Ernest Addison, stated earlier that surveys conducted by the central bank in August indicated that consumer confidence was bouncing back strongly and was currently above pre-lockdown levels.
“Consumers seem to be responding to the gradual lifting of restrictions—providing some scope for meaningful economic activities.
“Business confidence also increased, but yet to reach pre-lockdown levels. About 95 percent of businesses surveyed showed strong optimism, reflecting the improving macroeconomic conditions, stability in the exchange rate, lower input prices, moderation in lending rates, and positive industry prospects,” Dr. Addison said.
Real Composite Index of Economic Activity (CIEA) grew by 3.6 percent in July 2020, compared to a contraction of 10.6 percent recorded in May.
“Consumer spending, industrial consumption of electricity, and construction activities have all reached pre-lockdown levels, while tourist arrivals and port harbour activity are gradually edging upwards.
“In contrast, imports, exports, and private sector contributions to social security remain below pre-lockdown levels. In addition to the positive trends in the CIEA, other indicators monitored by the Bank of Ghana also point to signs of a recovery. Except for workplace clusters, which remained below baseline, all other indicators embodied in the google mobility data —commuting and travelling, visit supermarkets and pharmacy, and residential activity have moved above baseline,” he explained.
However, growth contracted in the second quarter of the year by 3.2 % driven mainly by contractions in the two major sectors of the economy; services and industry.
Year-on-year analyses showed that industry recorded the biggest contraction of 5.7 per cent in the second quarter of 2020, followed by services with 2.6 per cent. The Agriculture sector, however, grew by 2.5 in the second quarter.
The 2.5 per cent growth in Agriculture was driven mainly by expansion in three (3) out of the four (4) of its major sub-sectors. The expanding sub-sectors are Livestock (5.7 %), Crops (3.0%) and Fishing (0.3%). Forestry & Logging sub-sector, however, contracted by 8.4 percent in the second quarter of 2020.
The industry was weighed down heavily by a contraction in Manufacturing as well as Mining & Quarrying by 14.3% and 5.6% respectively. However, Electricity; Water Supply, Sewerage, Waste Management & Remediation Activities; and Construction sub-sectors expanded by 16.0%, 10.1%, and 3.6% respectively.
The Services sector was weighed down heavily by a contraction in Hotel & Restaurants (-79.4%); Trade, Repair of Vehicle & Household Goods (-20.2%); Professional, Administrative & Support (-11.2%); and Other Personal Service Activities ( -9.1%). Information & Communication experienced the biggest expansion of 74.2% with Transport & Storage growing marginally by 0.8 percent.
