The Central Bank forecasts that economic growth will recover to 2.5% in 2020

The Bank of Ghana anticipates a recovery in economic growth of up to 2.5% in 2020, supported by large fiscal stimulus packages, supportive monetary policies and a widespread easing of restrictions.

Dr. Ernest Addison, the Bank governor who spoke at a press conference on the Monetary Policy Rate, said the economy has also started to experience some recovery as price pressures that resulted from restrictions related to the pandemic and lockdown measures in March 2020 were easing.
However, the recovery is expected to be gradual.

He said headline inflation, after rising sharply to 11.4% in July 2020, has started to decline, now to 10.5% in August, due to falling food prices.

He said food inflation has declined steadily from 15.1 percent in May to 11.4 percent in August, partly reflecting seasonal effects.

“Non-food inflation, however, has risen from 8.4 percent to 9.9 percent during the review period and underlying inflationary pressures have also decreased,” he added.

Dr. Addison said inflation expectations for businesses, consumers and the financial sector, derived from the latest round of the Bank’s surveys, had moderated.

The Bank’s core inflation measure, which excludes energy and utilities, also declined marginally.

He said that fiscal policy, provisional data on budget execution for the first seven months, showed an overall budget deficit of 7.4 percent of Gross Domestic Product versus the revised target of 7.2 percent of GDP during the COVID-pandemic. 19.

The primary balance also posted a deficit of 3.7% of GDP, above the forecast target of 3.4% of GDP.

During the period under review, total revenue and donations amounted to ¢ 27.7 billion GH compared to the goal of ¢ 26.8 billion GH.

Total expenses and settlement of arrears amounted to GH ¢ 56.2 billion, above the goal of GH ¢ 53.3 billion.

These events affected the stock of public debt, which rose to 68.3 percent of GDP (¢ 263 billion GH) at the end of July 2020, compared to 62.4 percent of GDP (¢ 218, 2 billion GH) at the end of December 2019.

Of the total debt balance, the internal debt was ¢ 125.1 billion (32.5 percent of GDP), while the external debt was ¢ 138 billion (35.8 percent of GDP), which which represents 52.4 percent of the total public debt.