Fitch Forecasts a 5.5% Expansion of GDP in 2024
Ghana’s economic prospects are increasingly promising, with Fitch Solutions forecasting growth to accelerate from 2.9% in 2023 to a three-year high of 5.5% in 2024. The optimism is underscored by recent data from the Ghana Statistical Service, which revealed a robust 6.9% year-on-year expansion in the second quarter of 2024, following a solid 4.8% growth in the first quarter.
The growth spurt in Q2 2024 has been largely attributed to a revival in industrial output, primarily driven by strong performances in mining and quarrying, as well as a recovery in the construction sector. Expenditure data reflects this momentum, with private consumption rising by 8.5% and exports surging 12.6% during the same period.
However, while the economic outlook remains strong, Fitch Solutions warns of a potential deceleration in growth in the latter half of the year. This forecast is predicated on two critical factors. First, the impressive export growth experienced in Q2 is unlikely to be sustained, as the surge was partly fuelled by a rebound in international oil sales linked to an uptick in crude production. This recovery appears to have peaked, which could cap export growth moving forward.
Second, private consumption growth is expected to moderate. After recovering from a steep decline in 2022, private consumption exhibited strong year-on-year increases of 18.7% and 19.2% in Q3 and Q4 of 2023, respectively. The high base effect from this rapid recovery may limit growth rates for the rest of 2024, especially amidst persistently rising inflation.
Despite these headwinds, Fitch emphasizes that robust consumer fundamentals point to healthy spending patterns ahead. Notably, the Bank of Ghana reported a substantial 21.1% year-on-year increase in mobile money transactions and a remarkable 42.5% rise in new payment card issuances as of June 2024, suggesting an underlying resilience in consumer confidence and economic activity.
