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The International Monetary Fund forecasts a 0.9% Gross Domestic Product growth rate for Ghana this year, according to its October 2020 World Economic Outlook Report.
The forecast is slightly below those projected by the World Bank, Fitch Solutions and the Bank of Ghana.
While the World Bank predicts a GDP growth rate that will make the country one of the best countries in Sub-Saharan Africa, Fitch Solutions forecasts a GDP growth rate of 1.3%, which also makes Ghana a country with superior performance in the sub-Saharan Africa region.
However, the Fund forecasts a GDP of 4.2% for 2021 and 4.5% in 2025, respectively.
That will bode well for government, businesses and consumers as tax revenue, profits and disposable income are expected to skyrocket. The reason is due to an expected significant jump in economic activities that will stimulate supply and demand.
With the exception of the Ivory Coast (1.8%), Ethiopia (1.9%), Kenya (1.0%) and Tanzania (1.9%), the country will surpass 46 countries in sub-Saharan Africa.
Growth on the continent will also contract by 3.0% and both South Africa (-8.0%) and Nigeria (-4.3%) will register huge negative growth rates.
Global growth rate
The International Monetary Fund said global growth is projected at -4.4% in 2020, 0.8 percentage points above the forecast in the June 2020 World Economic Outlook Report Update.
“The stronger projection for 2020 compared to the June 2020 WEO update reflects the net effect of two competing factors: the upward momentum of better-than-anticipated second-quarter GDP results (mainly in advanced economies) versus the downdraft of persistent social distancing and stagnation reopening in the second half of the year ”.
However, global growth of 5.2 percent is projected in 2021, 0.2 percentage point less than in the June 2020 WEO update.
The projected rebound to 2021 after the deep recession of 2020 implies a small expected increase in global GDP during 2020-21 of 0.6 percentage points relative to 2019, the Fund said.
Second quarter GDP results
Ghana’s economy contracted by -3.2% in the second quarter of this year, the first time it has contracted since 1983.
According to figures released by the Ghana Statistical Service, the sharp drop was largely attributed to some restrictions on the economy’s activities, which came to a virtual halt during the partial lockdown period, as a result of the coronavirus outbreak.
The information and communications subsector recorded the largest expansion of 74.2%, while the hotel and restaurant subsector also recorded the largest contraction of 79.4%.
