The Bank of Ghana has disclosed that in the real sector, provisional Gross Domestic Product (GDP) growth for the first quarter of 2023 was strong, surpassing expectations of many analyst and policymakers.

The latest data from the Ghana Statistical Service showed that real GDP grew by 4.2 percent in the first quarter of 2023, compared with 3.0 percent recorded in the corresponding quarter of 2022. Non-oil GDP growth was 5.5 percent compared with 3.7 percent in the same period of 2022.

The observed growth outturn was largely driven by the Services and Agricultural sub-sectors which grew by 10.1 percent and 4.8 percent, respectively. However, the Industry sub-sector contracted, and recorded a decline of 3.2 percent

Meanwhile, provisional data on budget execution for the period January – May 2023 indicated an overall broad cash deficit of 1.8 percent of GDP, against the programmed budget target of 4.0 percent of GDP. The primary balance (cash basis) recorded a deficit of GH¢1.2 billion (0.1 percent of GDP), against a deficit target of GH¢6.7 billion (0.8 percent of GDP).

Total revenue and grants amounted to GH¢44.9 billion (5.6 percent of GDP), short of the target of GH¢54.6 billion (6.3 percent of GDP). Total expenditure was GH¢59.5 billion (7.4 percent of GDP) below the target of GH¢82.8 billion (9.5 percent of GDP). These developments resulted in an overall cash deficit of GH¢14.6 billion, of which GH¢11.7 billion was financed from domestic sources.

Prices of Ghana’s Major Export Commodities

The BoG stipulated that prices of Ghana’s major export commodities (cocoa, gold and crude oil) traded mixed on the international market in the first half year. Cocoa prices surged to record highs last seen over a decade ago, triggered by tight supplies from West Africa coupled with expectations of a global deficit in the 2022/2023 crop season.

On a year-to-date basis, cocoa beans gained 25.5 percent to settle at US$3,185.29 per tonne in June 2023. International benchmark crude oil prices lost 7.8 percent in the year to close at US$74.98 per barrel due to concerns that sluggish global growth could reduce energy demand. However, decisions by OPEC+ to deepen production cuts moderated the losses somewhat. The price of gold went up by 8.1 percent year-to-date to settle at US$1,942.07 per fine ounce as increased fears over global recession and possible slower interest rate hikes in the United States loom. Increased demand for the metal from China also helped push up prices.

In the first six months, the trade balance improved significantly to a surplus of US$1.8 billion, compared with US$1.5 billion a year earlier, mainly on account of a 13.4 percent decline in imports which outweighed a 7.9 percent drop in export earnings.

The decline in total export earnings was due to lower earnings from crude oil. Higher gold and cocoa exports earnings moderated the losses. Crude oil exports dropped by 41.3 percent to US$1.7 billion, driven by lower production volumes from the Jubilee and TEN fields and decline in world prices. Gold exports, on the other hand, increased by 14.2 percent to US$3.5 billion.

The trade surplus, together with lower outflows in the investment income from lower external debt service payments due to the debt standstill, resulted in a current account surplus of US$849.2 million, compared with a US$1.1 billion deficit recorded a year earlier. Similarly, the capital and financial account recorded reduced net outflow of US$897.3 million, on the back of lower outflows in the financial accounts.