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Ghana’s financial state to improve by 6.5% – not 7.6% – in 2019 – EIU


The Economist Intelligence Device (EIU) has stated, with consumer demand from customers remaining robust for the duration of the yr, helped by the reduce price tag of credit, it jobs Ghana’s GDP to achieve 6.5% in 2019.

This projection is about 1.1% fewer than the federal government has projected to develop the GDP this yr.

The 2019 Spending budget introduced by the Finance Minister, Ken Ofori Atta, proposes an over-all actual GDP development specific of 7.6%, higher than the 2018 anticipated growth of 5.4%.

In the government’s personal estimation, non-oil authentic GDP advancement for 2019 is budgeted at 6.2% as against 5.4% predicted for 2018.

For conclusion-time period inflation for 2019, the federal government projected 8.% which is practically the identical as the targeted inflation (8.9%) for calendar year-stop 2018, although the fiscal deficit concentrate on is 4.2% of GDP, a minor higher than the 2018 projection of 3.7%.

Nevertheless, EIU more assignments in its most recent report on Ghana that GDP advancement will relieve to 5.7% in 2020 as “Ghana is impacted by weaker world-wide economic problems – weighing on investment flows into the country – although government and private usage ranges will increase marginally forward of the election that 12 months.”

Study EIU’s entire projections on Ghana’s economy below.

Economic expansion

Financial progress about the forecast period of time will be pushed predominantly by the hydrocarbons sector, with a continued ramping up of oil and gas creation anticipated. Even so, this oil-pushed growth will mask constraints such as low productivity, infrastructure bottlenecks and relatively weak access to credit elsewhere in the economy. We expect there to be some spillover effects from hydrocarbons – with increases in broader industrial production, infrastructure investment and auxiliary services – but this will be fairly limited.

In January Tullow Oil increased the production outlook for Ghana’s Jubilee and TweneboaEnyenra-Ntomme oilfields for 2019, inspite of the weak rate outlook for the calendar year. The firm is searching to create earnings to company money owed built up from high-priced regional exploration and development operate. Outdoors the oil sector, we count on lending development to proceed to recuperate from a slump in early 2018, which was triggered by a rise in the reserve requirement.

A much better banking sector next consolidations will also be in a placement to just take advantage of enhanced liquidity conditions subsequent the January 2019 lower in the policy price, which will help advancement in industrial exercise.

Shopper need will continue being sturdy all through the calendar year, assisted by the lower expense of credit, but ultimately constrained by low value added in the agricultural sector—which serves to limit wage growth for workers—and price rises moderating consumer sentiment. Accordingly, we forecast total GDP progress of 6.5% in 2019.

We be expecting growth to relieve to 5.7% in 2020 as Ghana is affected by weaker international economic conditions—weighing on investment flows into the country—although government and private use ranges will increase a bit ahead of the election that yr. In February Aker Electricity declared the discovery of 450m-550m barrels in the Deepwater Tano Cape A few Details block off the coastline of Ghana, with possible recoverable reserves of just about 1bn barrels.

The to start with oil from the Aker fields is envisioned by the to start with quarter of 2021. Progress is predicted to ordinary 5.9% in 202123, reflecting the advancement of these new oil and fuel means boosting output volumes, put together with our expectations for a restoration in world wide oil charges. In addition, we assume to see stronger non­oil performance as the government’s policy reform efforts to boost the private sector —such as One District, One Factory—start to bear fruit. 

On the other hand, agricultural growth will go on to be hampered by unfavourable potential clients for the cocoa sector, reflecting the lousy underlying quality of the tree stock; some 40% of Ghana’s cocoa farms are infected with diseases (particularly swollen shoot virus) or have overaged stock, and this will temper progress in yields. Very hot, dry temperature at the begin of the period will also weigh on cocoa output in 2019.


We be expecting that annual normal inflation will continue to be elevated in 2019, although it will average slightly to 9.6%, from 9.8% in 2018. The weaker cedi—combined with growth in private consumption levels—is driving increases in consumer prices, notably through the rising cost of imported foods objects (which constitute a big share of the full food bill). We hope the Bathroom to take care of to hold inflation inside the official goal band of 6-10% during 2020-23. Having said that, with fiscal consolidation taking location at a relatively sluggish speed and domestic desire remaining robust, inflation will keep on being close to the upper bound of the concentrate on selection, averaging 9.1% in 2020-23.

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