Ghana’s industrial sector to recover in 2022, Fitch report
Ghana to record average annual inflation of 9.0% in 2022, Fitch
A report by Fitch ratings limited has indicated that Ghana’s economy will grow by 5.5 percent in 2022.
The reports also estimated that Ghana’s Gross Domestic Product (GDP) grew by 4.7% in 2021 compared to 0.4 percent growth recorded in 2020.
According to the report, the 5.5 percent GDP growth rate for 2022 will be driven by the growth of Ghana’s industrial sector, particularly, the oil sector.
“We forecast growth to increase further to 5.5% in 2022, as the industrial sectors, including oil, recover in line with global growth recovery. Ghana experienced three years of strong growth prior to 2020, largely driven by increasing oil production. We expect oil production to increase to 190 thousand barrels per day (kbpd) in 2022, from an estimated 160 kbpd in 2021, but to remain flat through 2023, which will limit Ghana's medium-term growth potential,” the report said.
The report also stated that Ghana’s growth rate for 2022 will not be significantly affected by the COVID-19 pandemic because the level of hospitalisation has reduced significantly.
“The number of Covid-19 cases has increased dramatically in January, due to the Omicron wave, but hospitalisations and deaths remain below previous waves. Omicron is not likely to significantly impact 2022 growth. However, only 20% of Ghanaians have at least one vaccine dose. The low level of vaccination means that Covid-19 will continue to present risks to Ghana's medium-term growth,” it said.
Fitch also predicted that the inflation rate will drop to an annual average of 9.0 percent from the 9.8 percent average recorded in 2021
“We forecast average annual inflation to decelerate slightly to 9.0% in 2022 after averaging 9.8% in 2021. Global supply chain issues fed through to domestic inflation, as did higher energy prices. The Bank of Ghana raised its main policy rate by 100bp to 14.5% in November 2021, reversing the 100bp cut that came in May. We envisage additional rate hikes in 2022, which could further exacerbate the government's domestic debt interest costs.” Read Full Story
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