Ghana Economic Forecast

Ghana Economic Outlook

November 13, 2018

The economy posted solid growth in the second quarter, propped up by soaring output within the industrial sector. The industrial sector’s strong performance was underpinned by the booming mining and quarrying industry, which expanded by nearly a quarter in Q2 in annual terms. On the external front, solid global demand and higher prices for gold and cocoa—Ghana’s top two export commodities—were likely behind a marked acceleration in exports in the second quarter. Incoming data suggests that the economy likely lost some traction in the second half of the year, however. The PMI slipped into negative territory in September, signaling a deterioration in Ghanaian business conditions and, despite bouncing back to positive territory in October, points to a slowdown in private sector activity in the second half of 2018. Meanwhile, inflation remained moderately elevated in Q3 which, coupled with a weakening currency, potentially weighed on household purchasing power, boding ill for private consumption growth in Q3.

Ghana Economic Growth

Strong domestic demand dynamics will underpin growth next year thanks to an upturn in consumer spending and elevated fixed investment growth. Meanwhile, the external sector should benefit from a favorable price outlook for Ghana’s key commodity exports. Nevertheless, the financial sector remains vulnerable, partly due to high levels of non-performing loans, as reform measures pursued by the Central Bank have yet to prove effective in improving the availability of credit. Met the why particular panelists expect the economy to expand 6.2% in 2019, which is unchanged from last month’s forecast, and 5.8% in 2020.

Ghana Economy Data

20132014201520162017
Population (million)25.626.226.927.628.3
GDP per capita (USD)1,7671,4181,3461,5111,654
GDP (USD bn)45.237.236.242.446.8
Economic Growth (GDP, annual variation in %)7.34.03.83.78.5
Consumption (annual variation in %)15.9-5.94.32.9-  
Investment (annual variation in %)-26.119.76.6-12.0-  
Industrial Production (annual variation in %)6.60.8-0.3-0.516.7
Unemployment Rate2.22.22.22.32.4
Fiscal Balance (% of GDP)-11.1-11.1-6.9-8.7-5.9
Public Debt (% of GDP)56.870.272.273.1-  
Money (annual variation in %)18.233.026.624.619.8
Inflation Rate (CPI, annual variation in %, eop)11.817.017.715.411.8
Inflation Rate (CPI, annual variation in %)8.315.517.217.512.4
Policy Interest Rate (%)16.0021.0026.0025.5020.00
Exchange Rate (vs USD)2.203.203.814.304.54
Exchange Rate (vs USD, aop)2.073.053.783.944.11
Current Account (% of GDP)-12.6-9.9-7.8-6.7-4.5
Current Account Balance (USD bn)-5.7-3.7-2.8-2.8-2.1
Trade Balance (USD billion)-3.8-1.4-3.2-1.81.1
Exports (USD billion)13.813.211.311.113.8
Imports (USD billion)17.614.613.512.912.7
Exports (annual variation in %)2.1-4.3-21.67.923.5
Imports (annual variation in %)-1.2-17.0-7.5-4.4-1.7
International Reserves (USD)5.65.55.96.27.6
External Debt (% of GDP)36.849.457.050.4-  

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Ghana Facts

ValueChangeDate
Exchange Rate4.860.0 %Nov 29
Stock Market0.10.0 %Nov 29

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