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Research firm IC Africa is optimistic about Ghana’s economic growth in 2024, projecting a 3.4% expansion, up from the 2.9% growth rate in 2023.
IC Africa attributes the positive outlook to improved conditions in key sectors, particularly industrial activities. Their forecast range for overall real Gross Domestic Product (GDP) growth is between 2.9% and 3.9%.
“We tip the extractive sector to hold industry aloft with construction and manufacturing improvements adding further tailwind for industrial growth,” IC Africa stated in its commentary on the first quarter of 2024 GDP figures released by the Ghana Statistical Service.
“In the services sector, we expect ICT, trade, hospitality, finance and insurance activities, and transport and storage to support growth with election-related spending as a key catalyst,” the firm noted, as quoted by Joy News.
Meanwhile, Fitch Solutions has revised its forecast for Ghana’s real GDP growth in 2024 to 4.3%, up from an earlier estimate of 3.8%, and a 4.5% growth rate for 2025.
Despite high inflation averaging 24.2% in Q1 2024, Fitch Solutions predicts it will decline to 19.5% by the end of the year due to statistical base effects.
Ghana’s real sector showed signs of emerging recovery from the 2023 trough with stronger overall growth momentum in the first quarter of 2024, consistent with the full-year growth outlook.
Overall real GDP expanded by 4.7% year-on-year in Q1 2024, outpacing the 3.1% growth in the same period of 2023 and marking the highest quarterly growth since Q2 2022.
The recovery was driven by a rebound in the industrial sector, which grew by 6.8% year-on-year, benefiting from improved activity in key sub-sectors and favourable base effects. However, growth moderation in the agriculture (4.1%) and services sectors (3.3%) indicates lingering fragility within the real sector. This fragility was highlighted by the slower growth rate in non-oil real GDP, which stood at 4.2% y/y in Q1 2024.
The moderation in services sector growth reflects contractions in fiscal-dependent sectors, as the International Monetary Fund (IMF) induced fiscal restraint led to a normalization in public sector activity following increased recruitment and higher remunerations in Q1 2023 before the IMF programme.
Source: Daily Mail GH
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