Governor of the Central Bank, Dr Ernest Addison, has averred that the 1.1% Q3 contraction of the economy is consistent with the rebound of the economy.
According to him, the contraction of the economy by 1.1% for Q3 2020 from a previous contraction rate of 3.2 per cent for Q2 2020, indicates a recovery of the economy.
The recovery of the economy, he noted is backed by available data from the Central Bank’s survey on consumer and business confidence levels which have returned to pre-lockdown levels.
“The Bank of Ghana on the basis of recent available data believes that the economy is on a rebound. And that this rebound can be attributed to the evidence of some green shoots in economic activity gleaned from the Bank of Ghana’s surveys on consumer confidence which had bounced back to prelockdown levels as consumers responded favourably to the gradual lifting of restrictions — providing some scope for undertaking meaningful economic activities. Business confidence has also improved although the Index remained below pre-lockdown levels. Our latest high frequency economic indicators, such as consumer spending, industrial consumption of electricity, and construction activities have all reached pre-lockdown levels,” said the Governor.
“Just yesterday, the Ghana Statistical Service put out an estimate of the third quarter GDP growth suggesting that the economy contracted by 1.1 percent during the third quarter. It must be pointed out that this is consistent with the rebound view as the economy has recovered largely from a contraction of 3.1 percent to 1.1 during the quarter. Recent report from the International Growth Centre (IGC) corroborates this view as employment rates and hours worked per adult which fell substantially in March and April reverted to its Covid-19 pre-lockdown levels in September,” added Dr Addison.
The Governor made the above assertion while delivering an alumni lecture at the University of Ghana on the theme: Pandemic, The Economy and Outlook.
The Ghana Statistical Service (GSS) on Wednesday, December 17, released data indicating that the economy had gone into a recession following its contraction for two consecutive quarters – Q2 2020 and Q3 2020 – making it the first time Ghana had recorded a recession in 37 years following the Economic Recovery Programme (ERP) of 1983.
An economy goes into a recession when its Gross Domestic Product (GDP) records negative growth for two or more straight quarters.
A further prolongment of the recession can result in a depression of the economy.
