Ghana’s GDP to hit a four-decade low of -0.9% this year
Ghana’s economic growth will suffer a huge impact due to the coronavirus pandemic plunging it to a 40-year low, NKC African Economics, an economic think tank, has predicted.
Ghana is one of many countries across the globe feeling the pinch of the coronavirus, which has slowed global economies.
Manufacturing has slowed with lockdowns and restrictions on movements, and imports have also been disrupted as countries focus on essentials not produced in Ghana. The drop in global prices of crude due to low demand also means Ghana’s revenues will plummet.
The South Africa-based Oxford Economics company stated, ”The economic impact would be severe, with real economic growth expected to slow to a four-decade low of -0.9% this year”.
In its annual profile on Ghana released on April 24 authored by Senior Economist, Pieter du Preez and Political Analyst, Louw Nel, NKC African Economics explained that they expect the “current account deficit to widen to $3.4bn (5.4% of GDP) this year, from an estimated $1.7bn (2.5% of GDP) last year”.
“Given the lack of global demand, the disruptions in global supply chains, and travel restrictions, we expect the trade and services accounts to be hardest hit in 2020. Although gold prices continue to rise, it will do little to soften the blow, as demand remains weak,” the report added.
“We now project the fiscal deficit to widen to 8.4% of GDP this year, from a previous forecast of 4.9% of GDP,” the report added.
However, the firm’s forecast indicates that Ghana’s economy would be bullish in 2021 with a GDP of 8.21, the highest between 2018 and 2023.
As demand markets drop for major goods and services, the firm is also predicting “inflation to trend even lower to 7.3% over the short term”.
Attached is the full report: