Ghana Q2 GDP: Beyond the numbers
Government Statistician at the Ghana Statistical Service says the 4.8 per cent GDP growth rate recorded in the second quarter of this year may not fully reflect the effects of Russia's invasion of Ukraine until the third and fourth quarters of this year. John Gatsi, Dean of University of Cape Coast School of business joins CNBC Africa to breakdown the sectoral performance as the country tackles high inflation, depreciating local currency and high public debt.
Wed, 21 Sep 2022 11:58:54 GMT
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AI Generated Summary
- The second quarter GDP growth rate in Ghana stood at 4.8%, showing an improvement from the previous quarter. However, sustaining this growth momentum until the year-end may prove challenging due to declining consumer demand and limited access to credit.
- The engagement with the IMF and the potential need for domestic debt restructuring add another layer of complexity to Ghana's economic situation. Financial institutions, insurance companies, and labor unions all need to be clear on the implications of any restructuring decisions.
- The upcoming Bank of Ghana meeting is expected to address pressing issues such as inflation and currency depreciation. Policy announcements may include an increase in the policy rate to tackle these challenges and maintain financial stability in the country.
The latest GDP figures for Ghana's second quarter have been released, showing a growth rate of 4.8%, an increase from the 3.3% recorded in the first quarter. However, John Gachi, the Dean of University of Cape Coast School of Business, warns that the momentum may not be sustained until the end of the year due to various challenges faced by the country. Consumer demand is on the decline, access to credit for the private sector is limited, and the services sector is lagging behind while industry and agriculture are not performing as expected. The complex mix of factors such as inflation, balance of payment challenges, and currency depreciation paint a challenging picture for Ghana's economic outlook. The looming engagement with the IMF signals a potential need for domestic debt restructuring, which poses its own set of complications. Financial institutions, insurance companies holding pension funds, and labor unions all need to be clear on the implications of any restructuring decisions. The upcoming Bank of Ghana meeting is expected to bring policy announcements, with a potential increase in the policy rate to combat inflation and currency depreciation. Looking ahead, the effects of the Russia-Ukraine crisis are expected to continue impacting Ghana's economy in the coming quarters. While the crisis may have pushed food prices up, Ghana has the capacity to produce those items domestically, leading to calls for a focus on economic reform rather than solely attributing challenges to external factors.
