Databank pegs Ghana’s 2021 growth rate between 3.9% and 4.9%
Ghana’s growth rate for the year 2021 has been pegged between 3.9 percent and 4.9 percent by the investment firm, Databank.
According to Databank Research, the research arm of the investment bank, the ongoing recovery process of the economy will be sustained by the increased utilization of spare production capacity in the manufacturing and trade sub-sectors.
“We expect the increased utilisation of spare production capacity to sustain the recovery in the manufacturing and trade sub-sectors. We, however, view the rising cost of production occasioned by the tax hikes, transport fare hikes, and higher fuel cost as a downside risk to the expansion in manufacturing and trade.”
“But the food harvest season in the third quarter 2021 and the main cocoa season in the fourth quarter 2021 should propel agriculture growth in the second half of the year, albeit with some risk from the unfavourable rainfall pattern across the southern sector,” disclosed Databank in its assessment of the Ghanaian economy.
Databank in the report continued saying, “With the trade sub-sector also posting a modest growth of 2.7%, we believe Ghana’s growth pulse is gradually strengthening, albeit with downside risks. The sharp contraction recorded in second-quarter 2020 provides a favourable base effect for a stronger growth print for second quarter 2021.”
On the downside, the report said contractions in the extractive and hospitality sectors constrained growth for the period, adding, within the extractive sector, mining & quarry (excl. oil & gas) contracted by 5.3% while the oil & gas sector shrunk by 16.2% in first-quarter 2021 (vs. -3.6% in first quarter 2020).
Read: Ghana: Economic outlook improving despite pandemic risks, rising debt vulnerabilities – IMF
This contraction is the 5th consecutive quarter of negative growth within the extractive sector, reflecting the lingering impact of Covid-19 on physical demand and the supply of fuel and metals.
The hospitality industry showed signs of recovery as the rate of contraction moderated from -73.0% in the second quarter of 2020 to -10.7% in the first quarter of 2021.
Ghana’s economy for the first quarter of this year according to the Ghana Statistical Service (GSS), expanded by 3.1% spurred by Construction (14.2), Manufacturing (6.1%), ICT (22.1%), Livestock (5.5%), Crops and Cocoa (4.9%), Financial and Insurance Services (4.8%)and Transport (3.0%).
Compared to the same period last year, GDP growth in the first quarter of 2021 declined by 3.9 percentage points as against the recorded 7 percent GDP growth in Q1 2020.
The slowed growth rate in GDP for Q1 2021 when compared to Q1 2020, can be attributed to the country’s slow-paced recovery from the adverse impact of the Covid-19 pandemic on the economy.
