Decline in projection attributed to low level of household spending
Ghana GDP grew by 6.2 percent in the 3rd quarter of 2021
Fitch Solution in its 1st Quarter 2022 Ghana Country Risk Report has revised Ghana’s growth projection for 2021 from the earlier forecast of 4.5 percent to 4.2 percent.
According to the report, the main reason for the slump in the projected growth rate was the low level of household spending.
“At Fitch Solutions, we continue to expect Ghanaian economic growth to come in below trend at 4.2 percent in 2021, largely as a result of a fairly modest recovery in household spending following the first phase of the Covid-19 pandemic in 2020. This compared to average of 5.3 percent over 2015-2019," the report said.
“The recovery since the slump in 2020 (when growth slowed to 0.4 percent, a multi-year low) has been modest, with real Gross Domestic Product (GDP) rising by 3.1 percent year-on-year in Quarter 1 2021 and 3.9 percent in Quarter 2 2021."
According to Fitch Solutions the "growth in private consumption (71.6% of GDP in 2020) will be below trend over 2021 (3.8 percent, compared to 4.2 percent during 2015-2019), adding 2.7 percentage points to headline economic growth.
“Consumer confidence has been subdued in recent months, partly reflecting the country’s slow inoculation programme. Living costs have also remained high – inflation was 10.6% year-on-year in September – which together with a slow recovery in labour market conditions will constrain households’ disposable incomes”.
Provisional data from the Ghana Statistical Service (GSS) indicates that Ghana’s economy would be expanded by 6.6% in the 3rd quarter of 2021.
According to the GSS provisional figures indicated that the sub-sectors that expanded in 3rd quarter of 2021 included the Education (24.2%); Health & Social Works (20.5%); Information & Communication (17.0%); Professional Administrative & Support (16.7%); Hotel & Restaurants (16.4%); Public Administration & Defence, Social Security (16.3%), Fishing (14.3%); Real Estate (11.5%); Crops (9.8%) Read Full Story
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