Global economic research group, FocusEconomics is predicting economic growth for Ghana in the medium term if the current energy situation is sustained and improved to supply reliable power to the private sector.
The group in its latest report pointed out that “growth conditions are expected to recover, supported by a sustained improvement in the energy situation, and anticipated increase in the production of oil and gas”.
They, however, warned that recent hike in utility prices may harm private consumption, causing aggregate demand to slow down —while the country faces some macro-economic challenges due to weak commodity prices, volatile exchange rate and high inflation.
FocusEconomics is a leading provider of economic analysis and forecasts for 127 countries in Africa, Asia, Europe and the America; publishing timely and accurate business intelligence from a variety of industries, including major financial institutions, multinational companies and government agencies.
In its monthly forecast, the group predicted Ghana’s economy to expand by 4.6 percent in 2016, which is down 0.1 percentage points from last month’s forecast, while 2017 growth is expected to hit 6.3 percent.
On inflation, the group was optimistic Ghana would average inflation rate at 15.5 percent in 2016, before moderating slightly to 11.9 percent in 2017.
“FocusEconomics Consensus Forecast panelists expect the monetary policy rate to end 2016 at 23.71 percent”, the report said adding that 2017 will end at 22.40 percent.
Real sector deceleration in Q3 of 2015
In the third quarter, GDP expanded 3.6 percent over the same quarter of the previous year and the figure marked a deceleration over the 3.8 percent growth observed in the previous quarter and the slowest increase in over a year.
The expansion in the third quarter according to the Ghana Statistical Service (GSS), was mainly driven by a rebound in the agriculture sector, which increased 3.2 percent on an annual basis (Q2: -0.9% year-on-year).
Conversely, growth in industry slowed from 4.5 percent in Quarter two to 3.6 percent in Quarter three, which marked the slowest increase in three quarters.
In addition, the service sector grew only 4.9 percent in the third quarter, which was a slowdown over the impressive 10.9 percent increase recorded in the second quarter.
Preliminary estimates released by the GSS show that the economy has likely shown growth of 4.1 percent in 2015.
The figure marks an improvement over the 4.0 percent increase seen in the previous year.
Monetary sector outlook
In December 2015, consumer prices increased 1.07 percent over the previous month, which followed the 1.08 percent increase tallied in November. Last month’s figure had marked the highest reading in nine months. December’s increase was mainly driven by higher prices for food.
Inflation in December inched up from 17.6 percent in November to 17.7 percent, thus reaching a five-month high.
Meanwhile, inflation remains well above the Central Bank’s target of 8.0 percent while annual average inflation in December ticked up from 17.1 percent in November to 17.2 percent.
