The economy recovered strongly in the 2nd quarter and will continue until the end of the year – Fitch Solutions

Ghana’s economy recovered strongly in the second quarter of this year and is expected to continue for the remaining quarters of the year, despite the presence of covid-19.

According to Fitch Solutions, a research arm of the Fitch rating agency, its data suggests that the economy is recovering strongly, in line with the Bank of Ghana’s composite index of economic activity as well as the survey. on business and consumer confidence.

The economy grew 3.1% in the first quarter of this year, helped by the construction, manufacturing, and information and communications subsectors.

But it was lower than what had been achieved at the same time in 2019.

“High-frequency data suggests strong recoveries in Kenya, Uganda and Ghana, while low Q12021 gross domestic product readings for South Africa and Mozambique indicate mixed prospects for southern Africa,” he stressed.

He added that “although Ghanaian GDP data has yet to be released at the time of writing, readings from the PMI and the Central Bank’s Composite Indicator of Economic Activity both indicate robust growth of economic activity in the first months of 2021.

Meanwhile, Fitch Solutions expects the policy rate – the rate at which the Bank of Ghana lends to commercial banks to stay the same at 13.5% for the rest of the year to support the economic recovery.

Senior Risk Analyst in charge of Sub-Saharan Africa at Fitch Solutions, William Attwell said the key rate will be kept at its current level to stimulate economic recovery.

“Our view now is that we expect the Central Bank to keep the benchmark interest rate at its current level of -13.5% until the end of the year. This is to allow the economic recovery to accelerate in the months to come ”.

He added: “We expect Ghana’s economy to be among the strongest economies in sub-Saharan Africa this year, growing at around 4.5%. We believe that the vaccine rollout in the coming months will help control covid-19 infections. “

The economy grew 3.1% in the first quarter

The Ghanaian economy grew 3.1% in the first quarter of this year, the lowest since the same period in 2019.

However, in the same period of 2020, the GDP growth rate was 7.0%.

According to figures from Ghana’s statistical services, the sub-sectors of construction (14.2%)), manufacturing (6.1%) and information and communication (22.1%) have were the main drivers of growth in the first three months.

The agriculture sector recorded the strongest growth of 4.3% and was followed by the service sector with a growth of 4.0%. The industry sector grew by a meager 1.3%.