Economy forecasted to have expanded by 8.9% in quarter 2

The economy is forecasted to have expanded by 8.9% in the second quarter of this year, even before the Ghana Statistical Service releases the growth rate data for the period.

According to the accounting and auditing firm, Deloitte Ghana, the expected increase in international trade, following the easing of restrictions in most economies, is expected to drive demand for commodities, which is favourable for commodity exporting countries like Ghana.

“This, coupled with the general increase in economic activity in 2021 is expected to help achieve the targeted growth. However, a critical success factor is how well we handle the rising COVID-19 cases. A strict enforcement of COVID protocols as well as an effective roll out of COVID vaccination will sustain the economic recovery process”, it pointed out.

Yaw Lartey, Partner in charge of Financial Advisory at Deloitte Ghana, said “the estimated Gross Domestic Product for 2021 is about ¢433 billion. This represents a growth of 8.9% compared to GDP as of the same period 2020. The key driver of the growth was the agriculture sector which grew by about 18%, largely on account of growth in the Crop subsector. We believe that some of the programmes and activities introduced by government are beginning to yield results, particularly those that support the Crop sub sector”.

“Also, we saw a significant growth in the Services sector, particularly in the Hotels and Restaurants. As we noticed, the Covid-19 adversely impacted on this sector, however, in one way or the other, some are recovering in the economy.  We witnessed a contraction of about 44% last year, but for this year we’ve seen a significant growth and that is driving the Services sector to grow at about 9%”, he added.

The economy witnessed pick-up in economic activity in the second quarter of this year, compared with the same period of last year in which there was virtually non-existent in demand and supply due to the partial lockdown and restrictions.

According to Deloitte, “initiatives such as the Ghana CARES ‘’Obaatan Pa’’ programme, is expected to aid in the recovery of the economy post COVID and as well increase in business activity.”

The government is forecasting 5 percentage points expansion in the economy this year. This is in line with projections by international institutions including the Economist Intelligence Unit, Fitch Solutions and the International Monetary Fund.

The accounting and auditing firm said the general increase in economic activity this year is expected to help achieve the targeted growth.

However, it cautioned the country to be mindful of the third wave of Covid-19.

The economy recorded a 3.1% Gross Domestic Product in the first quarter of this year.

According to figures from the Ghana Statistical Services, Construction (14.2%), Manufacturing (6.1%) as well as Information and Communication (22.1%) sub sectors were the main drivers of growth for the first three months of this year.

The agriculture sector on another hand recorded the highest growth of 4.3%.