Ghana’s GDP growth for 2024 revised downwards to 3.5%
Fitch Solutions has recalibrated Ghana’s economic trajectory, revising its 2024 GDP growth projection downward to 3.5%, a marginal shift from the earlier 3.7% estimate. This adjustment, though higher than the anticipated 2.7% growth for 2023, still trails behind the pre-pandemic average growth rate of 5%.
According to the research agency, it expects that the Ghanaian economy will enter a recovery phase in 2024, driven by stronger private consumption.
“We expect that the Ghanaian economy will enter a recovery phase in 2024, driven by stronger private consumption”.
“Soaring consumer price inflation over 2022-23 – due to the sharp sell-off of the Ghanaian cedi – weakened purchasing power of households and weighed on domestic consumption. However, we expect that price growth will moderate from an average of 40.3% in 2023 to 17.8% in 2024, driven by statistical base effects and more favourable exchange rate dynamics,” Fitch Solutions noted.
Regarding the growth of the economy in the last quarter of the year – 2023 – Fitch Solution noted that growth will remain subdued because Ghana’s purchasing managers’ index (PMI) for October and November remained broadly in line with quarter 3, 2023 – averaging 51.1 – pointing to only a slight expansion in the manufacturing sector (PMI values above 50 represent an expansion).
Both consumer and business confidence remained subdued going into quarter 4, 2023, suggesting that a notable recovery in domestic demand is unlikely at the end of 2023.
National accounts data published by Ghana Statistical Service shows that economic growth decelerated sharply to just 2.0% year-on-year in quarter 3, 2023 – from 3.2% in the preceding quarter – marking the weakest outturn since quarter 3, 2020 when the economy contracted by 3.5% due to the Covid-19 pandemic.
The slowdown in growth, Fitch Solutions notes, was primarily caused by a deeper contraction in the secondary sector – as a result of a downturn in the oil and gas industry – and weaker conditions in the services industry.
