Central Bank reports dip in business and consumer confidence amid economic uncertainties
The latest confidence surveys conducted in April 2024 have revealed a notable softening of sentiments, according to the Central Bank.
Both business and consumer confidence experienced a decline during this period. Consumer sentiments were particularly affected by uncertainties surrounding future economic conditions, while businesses voiced concerns over various operational challenges.
Despite these concerns, high-frequency real sector indicators within the domestic economy indicated a sustained uptick in economic activity throughout the first quarter of 2024.
The updated real Composite Index of Economic Activity demonstrated an annual growth of 2.1 percent in March 2024, an improvement from the 6.4 percent contraction recorded in the corresponding period of 2023.
This increase in economic activity was primarily driven by factors such as heightened imports, private sector contributions to SSNIT, and an increase in tourist arrivals.
Moreover, Ghana’s Purchasing Managers’ Index (PMI) portrayed a positive trajectory in business activity, with the index rising to 51.3 in April 2024 from 50.9 in March. This improvement was attributed to enhanced consumer demand, indicating a potential boost in economic activity.
However, amidst these positive developments, concerns lingered regarding recent exchange rate volatility and the intermittent power supply situation. Businesses expressed apprehensions that these factors could substantially elevate their operational costs in the foreseeable future, posing potential challenges to sustained economic growth.
While Ghana’s economy showed signs of resilience and recovery in the first quarter of 2024, with notable improvements in various economic indicators, the softening of confidence sentiments underscores the presence of lingering uncertainties and challenges that warrant careful monitoring and strategic intervention.
