Standard Bank Group Limited, a major South African bank and financial services group, has slashed Ghana’s growth forecast for 2022 to 3.1%, from the earlier 6.2%.

Standard Bank also lowered its 2023 Gross Domestic Product (GDP) forecast for the country to 4.1%, from the earlier 6.8%.

The government, in the 2022 Mid-Year Budget Review, cut the growth rate for this year to 3.7%, from the earlier projection of 5.8%. In line with this, the Standard Bank’s ‘Africa Market Revealed’ report indicated that the country’s growth now faces a confluence of downside risks in 2022 and 2023.

“Firstly, the government is running out of external financing options therefore, public investment in infrastructure is unlikely to underpin growth over the coming year.

“Secondly, the Ghana cedi’s plummet since January [2022] has further bumped up inflation, which would soften private household consumption over the coming year [2023]. Therefore, the BoG’s Monetary Policy Committee may have to further raise the key benchmark rate to stem rising inflation expectations as well as support the Ghana cedi”.
Standard Bank Group Limited

This, it stated, may also further reduce private investment over the coming year. It also pointed out that the country’s growth rate also faces rising domestic fuel prices, and with no fuel subsidies to offer any support.

GDP growth also faces rising domestic fuel prices

“GDP growth also faces rising domestic fuel prices, and with no fuel subsidies to offer any support. Still, the gold sector may offer some upside to our outlook. Off its low base of 2021, gold production should therefore recover, based on key mines’ forecasts”.
Standard Bank Group Limited

Balance of payments deficit to widen to 4.1% of GDP in 2022. Standard Bank said the balance of payment deficit will widen to 4.1% of GDP in 2022, and then narrow to 2.6% in 2023.

“We now expect the C/A deficit to widen to 4.1% of GDP in 2022, then narrow to 2.6% in 2023. Still, financing a wider C/A deficit in 2022 would prove near impossible due to the lack of external funding”.
Standard Bank Group Limited

Economy expanded by 3.3% in the first quarter of this year

Ghana’s economy slow down in growth in the first quarter of 2022, compared to the same period last year, provisional data from the Ghana Statistical Service has revealed.

The economy recorded 3.3% Gross Domestic Product (GDP) growth rate, which was aided by some marginal expansion in the Services and Agriculture sectors.

In actual fact, this is the lowest growth rate recorded post COVID-19. In the same period of 2021, the growth rate was 3.6%.

GDP growth rate without oil and gas for first quarter of 2022 was 3.7% which compares to the same period in 2021 with a growth rate of 5.3%.

According to Government Statistician, Professor Samuel Kobina Anim, the Agriculture sector led the growth rate, expanding by 5.6%, followed by Services with a growth rate of 3.7% and industry with a GDP of 1.3%. The Fishing sector recorded the highest growth rate of 26.1% in the Agriculture sector, followed by Livestock with 5.5% and Crops, 5.2%.

Forestry and Logging however, contracted by 0.5%. Within the Services sector, Information & Communication led the expansion, growing by 26.6%. Transport and Storage (6.4%), Hotel and Restaurants (5.3%), Finance & Insurance (4.2%), Other Personal Service Activities (3.1%) and Trade, Repair of Vehicle, Household Goods (2.3%) followed suit.