Economic growth continued to rebound, exceeding initial expectations – Asiama

On the domestic front, growth continued to rebound, exceeding initial expectations, Governor of the Bank of Ghana (BoG), Dr Johnson Asiama has said.

He stated that provisional data from the Ghana Statistical Service estimated real Gross Domestic Product (GDP) growth at 5.7 percent in 2024, higher than the programmed growth rate of 4 percent for 2024, and the 3.1 percent recorded in 2023.

Non-oil GDP grew at 6 percent compared with 3.6 percent recorded in 2023, he said.

Addressing the 123rd Monetary Policy Committee (MPC) press conference in Accra on Friday, March 28, Dr Asiama said “The growth outturn in 2024 was driven by activities in the industry and services sectors. However, growth in the agricultural sector was slower, driven by lower crop yield due to adverse weather
conditions, among other factors.”

The Bank of Ghana’s real sector indicators point to a sustained improvement in economic activity, amid significantly improved business and consumer sentiments, he added.

The updated Composite Index of Economic Activity (CIEA) rose by 5.7 percent year-on-year in January 2025, relative to 3.5 percent in the same period of 2024, driven by increased consumption, international trade activities, and private sector credit
growth.

“The confidence surveys conducted in February 2025 also showed significant improvement in both consumer and business sentiments, buoyed by expectations for an improved macroeconomic environment,” Dr Asiama said.

Dr Asiama also said that prices of Ghana’s major export commodities traded mixed on the international commodities market in early 2025.

He said  that “Gold prices crossed the US$3,000 per fine ounce on March 14, 2025, on account of heightened economic uncertainty triggered by the trade and geopolitical tensions, persistent inflation, and weakening US dollar.”

In February 2025, he said, gold prices averaged US$2,897.3 per fine ounce, indicating a year-on-year growth of 9.7 percent. Similarly, crude oil prices recorded a marginal annual growth of 2.4 percent to settle at an average price of US$74.95 per barrel.

Cocoa prices, however, declined by 8.5 percent driven by improving supply outlook for the current 2024/25 season, Dr Asiama stated.

In the banking sector, Dr Asiama said that banks’ performance continued to improve.

Total bank assets recorded 34.0 percent growth at the end of February 2025 relative to 12.1 percent growth, in the same period last year, he said.

With regulatory reliefs, the banking industry’s Capital Adequacy Ratio (CAR) was higher at 14.4 percent compared to 13.6 percent in the same period last year, Dr Asiama added.

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“Without reliefs, CAR was 12.1 percent. The industry’s Non-Performing Loan (NPL) ratio declined to 22.6 percent in February 2025 from 24.6 percent in February 2024. Excluding the loans in the loss category, which are fully provisioned, the NPL ratio as at end-February 2025 was 8.9 percent,” he said.

Dr Asiama further stated that overall, the Financial Soundness Indicators showed broad improvements in asset growth, solvency, liquidity, efficiency, and profitability.

.The fiscal policy stance was more expansionary than expected in 2024. The 2024 fiscal deficit, on commitment basis, was 7.9 percent of GDP against a target of 3.8 percent of GDP, on the back of higher expenditures than target.

“This notwithstanding, early indications from banking sector data suggest some improvements in fiscal performance in early 2025.

“This, along with the commitment to fiscal consolidation presented in the 2025 budget, should support the fiscal outlook. Also, the ratio of public debt declined supported by the debt restructuring,” he said.

Dr Asiama also said that private sector credit is beginning to show signs of recovery.

In February 2025, he said, private sector credit recorded 26.9 percent annual growth, compared with 5.1 percent in February 2024. In real terms, he added, credit growth was 3.1 percent, compared with a decline of 14.7 percent in February 2024.

 

 

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