Fitch predicts slow economic growth for Ghana in 2023

Fitch Solutions predicts that Ghana’s real GDP growth will decelerate to 2.9% in 2023, from 3.3% in 2022. According to data released by the Ghana Statistical Service, real GDP growth slowed to 2.9% year-over-year in Q322 from 4.9% in Q222.Information Guide Nigeria

The mining industry exhibited robust growth of 14.9%, whereas the manufacturing sector and construction industry both contracted, depressing economic activity overall.

Fitch Solutions forecasts that economic activity will have slowed further in Q422 due to strong price pressures and weak private sector sentiment.

In addition, the company anticipates that economic activity will decelerate further in 2023 as a result of tighter fiscal and monetary conditions and strong price pressures that weaken domestic demand.NYSC portal

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Despite challenging economic conditions, it is anticipated that Ghana’s export sector will remain relatively resilient. Increases in the production of the country’s most valuable commodities – gold, oil, and cocoa – will stimulate export growth.

Following the reopening of the Bibiani mine and the efforts to formalise artisanal and small-scale gold mining, the Fitch Solutions team predicts that gold output will continue to expand at a healthy rate. In addition, the Agribusiness team anticipates a robust increase in cocoa production in Q422 due to favourable weather conditions that will likely result in a robust harvest.

In the coming years, the country’s trade balance is also anticipated to improve. As a result of sluggish private sector activity, persistently high inflation, and rising taxes, import demand is likely to decline, thereby reducing the trade deficit. This will be bolstered by the rise in exports, which will add 2.1 percentage points (pp) to overall economic growth in 2023, up from 1.7 percentage points (pp) in 2022.

The tightening of fiscal and monetary conditions will, however, hinder the country’s economic growth. Taxes and interest rates have increased as a result of the government’s implementation of measures to reduce its budget deficit and curb inflation. These measures are likely to reduce consumer spending and investment, which will have a negative effect on economic growth.

The quarterly average rate of inflation in Ghana increased to 48.3% in Q422. This is significantly higher than the government’s goal of 8%, and it will likely remain a major concern in the coming years. The high inflation rate is the result of a number of factors, including rising food and fuel costs and a weaker currency. The government has implemented various anti-inflation measures, such as increasing interest rates and decreasing subsidies, but these have not been sufficient to bring inflation under control.JAMB Result

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