Ghana: IMF lowers 2022 GDP growth rate to 3.6%
The International Monetary Fund (IMF) has lowered Ghana’s growth rate for 2022 to 3.6% from the earlier projected 5.8% by government, but revised downwards to 3.7%.
The Fund’s projected growth rate is 0.1% less and 0.1% higher than the revised 3.7% and 3.5% growth rate by the government and the World Bank respectively.
The Fund further forecasts that economic growth in 2023 will slow down to 2.8% but however, peak strongly in 2027 reaching 6.8%.
Some economists say the projection by the IMF shows that the Fund is also optimistic about the projected expansion for Ghana’s economy by the end of 2022.
It is expected that projected revenue by government could be achieved. This may also have a positive impact of on Ghana’s debt to GDP ratio.
The Economic and Financial data released by the Bank of Ghana in October, 2022 put the country debt at GHS 402 billion. The debt to GDP ratio declined to 68% at the end of July 2022.
The data also puts the total value of Ghana’s economy, ending July 2022 at GHS 591 billion.
Meanwhile, the World Bank is projecting that Ghana’s Debt-to-GDP Ratio will hit 104.6% at the end of 2022, up from 76.6% in 2021.
Ghana’s 4.8% GDP growth for Q2 2022
Recorded GDP growth rate for the second quarter of 2022, is pegged at 4.8% by the Ghana Statistical Service [GSS].
According to the GSS, compared to growth in the previous quarter [1.1%], the posted 4.8% GDP growth marks a quarter-on-quarter growth of +3.7%.
Main drivers of growth, the GSS noted, were manufacturing and cocoa production.
The growth rate was driven by Manufacturing (8.8%), Crops and Cocoa (4.5%), Mining and Quarrying (4.4%), Information and Communication (12.4%) as well as the Education (13.2%) sub-sectors.
For the sectors, the Services sector (5.2%) expanded more than the national average. It was followed by Agriculture (4.6%) and Services (4.4%).
Nine sub–sectors within the Services sector recorded growth rates.
However, two contracted. They were Real Estate (-5.7%) and Professional Administrative and Support (-11.0%).
Similarly, three sub-sectors within the Agriculture sector expanded during the period. They were Fishing (7.8%), Livestock (5.8%) and Crops and cocoa (4.5%).
Forestry and Logging however contracted with a growth rate of -0.2%.
Also, Manufacturing (8.8%), Mining and Quarrying (4.4%) and Construction (0.4%) sub-sectors expanded.
However, Electricity (-2.2%) and Water Supply, Sewerage, Waste Management and Remedial Activities (-2.7%) contracted.
The Services sector continued to be the largest sector of the Ghanaian economy in the second quarter of 2022 with a share of 45.8% of GDP. The GDP share of Industry and Agriculture were 32.1% and 22.1% respectively.
In the Fund’s newest World Economic Outlook report, the Fund expressed worry that countries like Ghana will be affected by happenings in other developed economies as growth in those countries are expected to contract.
It warned that moves by Central Banks in developed countries to check inflation with further tightening will impact on economies like Ghana, as well as developments in Russia and Ukraine.
The Economic Outlook Report christened “Countering the Cost of Living” also warned that the worse is yet to come, warning that countries could face challenges.
“Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades”, the report said.
“The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook. Global growth is forecast to slow from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023. This is the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic” it added.
