Ghana’s growth rate revised to 4.7% by the IMF

Ghana’s growth rate has been revised to 4.7 percent by the International Monetary Fund (IMF).

The revision by the IMF in its October 2021 World Economic Report reflects a 0.1 percentage points upward revision by the Bretton Wood institution from an earlier growth rate projection of 4.6 percent for the country.

The IMF’s new growth rate projection is however, some 0.2 and 0.3 percenatge points lower than the World Bank’s 4.9 percent projection as well as the Government of Ghana’s 5 percent growth rate projection for the year.

The revision in the country’s growth rate is supported by data from the Bank of Ghana which indicates that the Ghanaian economy is on a rebound with a sustained momentum in pick-up in economic activity.

According to the Central Bank’s September 2021 Monetary Policy Committee Report, developments continue to point to sustained recovery in economic activity following the downturn at the peak of the pandemic.

“The Bank’s update of the Composite Index of Economic Activity (CIEA) for July 2021 reflected continued recovery in domestic economic activity. The real CIEA recorded a 20.0% year-on-year growth in July 2021, compared with 20.2% in June 2021, and 3.9%t growth in July 2020. The growth in the indicators were somewhat broad-based with port activity, imports, domestic VAT, and air-passenger arrivals accounting for the increase.”

Data from the Ghana Statistical Service indicated a stronger pick up in the annual GDP growth to 3.9% in the second quarter of 2021, from the 3.1% recorded in the first quarter, and a 5.7% contraction recorded in the same period of 2020. Non-oil GDP, for the same period, grew by 5.2%, compared with a contraction of 5.8% recorded for the same period in 2020.

The stronger growth performance in the second quarter, the Central Bank noted, reflects the sharp rebound experienced in the cocoa sub-sector which grew by 27.6%, supported by equally stronger growth of 18.7% in Hotels & Restaurants, 13.8% in Real Estate, and 10.7% in trade.

This stronger performance was however, moderated by a contraction of 18.9% in the mining and quarrying sub-sector, on account of a 10.8% contraction in the production of oil and gas.