Economy will expand in third and fourth quarters – BoG | Economy

The Bank of Ghana (BoG) has projected that the country’s economy will grow between two and two and a half percent this year.

This is a revision of the 0.9 percent growth that the BoG projected earlier this year at the height of the Corona virus pandemic, which has hit the global economy hard.

Ghana’s economy contracted 3.2 percent in the second quarter of this year from 5.7 percent in the same period last year as a result of the new Corona virus pandemic.

BoG Governor Dr. Ernest Addison, who revealed this at the 96 Monetary Policy Committee press conference in Accra on Monday, said the revised growth rate is based on the gradual rebound in the economy.

He explained that despite the contraction in growth in the second quarter, the data available to the BoG “showed some green shoots of rebound in economic activity. A sustained level of consumer and business confidence and the widespread growth of CIEA indicators support positive growth conditions in the outlook ”.

He went on to say: “Ghana’s economy has also started to experience some recovery as price pressures that resulted from pandemic-related restrictions and lockdown measures in March 2020 are eased. Headline inflation, after rising sharply to 11.4 percent in July 2020, has started to decline, now to 10.5 percent in August, due to falling food prices. Food inflation has fallen steadily from 15.1% in May to 11.4% in August, partly reflecting seasonal effects ”.

He explained that the engines of economic growth were returning to normal with prospects for a good recovery, indicating that “underlying inflationary pressures are also easing.”

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

That, the Governor said, was the result of supportive monetary and fiscal policies, which had provided the necessary foundation for the economy to withstand the negative impact of the pandemic on output.

“Things are going better. The drop in economic growth is not as deep as we anticipated, ”Dr. Addison said.

The Governor noted that the rebound in the world economy would serve as a catalyst for Ghana’s growth.

“The world economy has started to show signs of recovery. The recovery and improved sentiment in global financial markets should help ease pressure on emerging currencies. The external environment, which has improved, should support Ghana’s economic recovery, ”said Dr Addison.