IMF projects 4.2 % growth rate for Ghana

Ghana’s economy is projected to grow at a modest rate of about 4.2% this year, according to the International Monetary Fund’s latest updated World Economic Outlook Report.

Interestingly, that modest growth rate beats that which saw Mahama slumping Ghana’s economy to 3% and pushing the nation into an IMF Programme.

The experts believe that that modest feat, which still puts Ghana in the higher ranks of performance in West Africa and the world, is still likely to place Ghana as an attractive investment and business destination.

Forecasts

The forecast is consistent with Moody’s 4.0% and Fitch Solutions 4.8% forecasts. According to the Fund, Ghana’s growth rate will be higher than Sub-Saharan Africa’s regional average of 3.2 percent.

“In 2021, sub-Saharan Africa will recover only gradually. Regional growth next year is forecast at 3.1%. This is a smaller expansion than expected in much of the rest of the world, partly reflecting limited policy space to sustain a more expansionary fiscal stance in most countries”

“Compared with pre-crisis [COVID-19] trends, cumulative output losses from the pandemic will amount to about 14% of Gross Domestic Product over 2020–21. Key drivers of growth will include an improvement in exports and commodity prices as the world economy recovers, along with a pickup in both private consumption and investment—the former reflecting the continued relaxation of lockdown constraints”, the Fund further said.

Global economic growth

Meanwhile, amid exceptional uncertainty, the Bretton Wood institution said the global economy is projected to grow at 5.5% this year and 4.2% next year. This year’s forecast is revised up 0.3 percentage point, reflecting expectations of a possible vaccine and strengthening economic activity later in the year.

Jolt

“The projected growth recovery this year follows a severe collapse in 2020 that has had acute adverse impacts on women, youth, the poor, the informally employed, and those who work in contact-intensive sectors. The global growth contraction for 2020 is estimated at -3.5 percent, 0.9 percentage point higher than projected in the previous forecast (reflecting stronger-than-expected momentum in the second half of 2020).”

Ghana’s economy entered into recession in the third (-1.1%) of 2020.

The Agriculture sector, however, recorded the highest growth of 8.3%, whilst Industry and Services sectors contracted by 5.1% and 1.1% respectively.

Resilience

Ghana has been cited for remarkable economic growth after scoring remarkable performance, despite undergoing an IMF Progamme and strains and stresses arising out of the COVD-19 pandemic.

She has also been lauded for efficient management of the COVID-19, though a new wave of the pandemic has given the government cause for concern and it is doing its utmost to contain its second wave.

Sustaining modest growth

With the economy still resilient, the government is poised to put in place several contingency measures aimed at managing the incidence of rising figures in deaths and infection rates in re-igniting growth in attaining developmental goals.

By: Chris Lartey | @ThunderGhNews