Finance Ministry claim Ghana economy is rebounding

The newest official Gross Domestic Product (GDP) information launched by the Ghana Statistical Service (GSS) for 2020 and 2021 reveals that the financial system has expanded greater than was anticipated and exceeded the Sub-Saharan Africa (SSA) common progress of 4.5 p.c for 2021, whereas the speed of debt accumulation has slowed to pre-pandemic ranges. Fiscal growth has additionally slowed.

On 20th April, 2022, the official provisional 2021 fourth quarter and total 2021 annual GDP information have been launched by the Ghana Statistical Service (GSS).

According to the GSS, actual GDP expanded by 7 p.c within the fourth quarter of 2021 in comparison with the 4.3 p.c progress recorded within the corresponding interval of 2020. Similarly, non-oil actual GDP within the fourth quarter of 2021 expanded by 7.6 p.c in comparison with 5.7 p.c for a similar interval in 2020.

On an annual foundation, the provisional actual GDP progress for 2021 confirmed a optimistic outturn of 5.4 p.c, exceeding the 4.4 p.c 2021 projected outturn by 1 proportion level and the SSA common progress by 0.9 proportion level.

This is a transparent affirmation that the financial system is on the rebound put up the COVID-19 pandemic that noticed a revised progress price of solely 0.5 p.c in 2020.

Similarly, the non-oil actual GDP expanded from 1.0 p.c in 2020 to six.9 p.c in 2021 (the very best non-oil actual GDP progress price because the rebasing was executed in 2013) exceeding the goal of 5.9 p.c for the interval.

The Nominal GDP for 2021 is estimated at GH¢459,130.9 million, over GH¢18 billion greater than the projected outturn of GH¢440,869.4 million for the interval, up from GH¢391,940.7 million recorded in 2020.

The Non-oil nominal GDP for 2021 is GH¢437,975.2, up from GH¢378,147.9 million in 2020.

The main implication of this increased-than-projected GDP outturn for 2021 is that every one financial indicators expressed as a ratio of GDP will change to replicate the up to date GDP information. These ratios embrace the debt to GDP ratio, a key consider figuring out debt sustainability, the fiscal deficit to GDP ratio, and Revenue to GDP ratio.

The new GDP information additionally has implications for the nominal 2022 GDP goal and the expansion price because it is primarily based on the 2021 GDP information which have now been up to date.

The fiscal deficit (together with vitality and Finsec funds) is now displaying a decline (as a p.c of GDP) from 15.0 p.c to 14.7 p.c of GDP for 2020. Similarly, the fiscal deficit of 2021 has diminished from 11.7 p.c to 11.4 p.c.

Ghana’s public debt inventory expressed as proportion of GDP now stands at 76.6 p.c of GDP on the finish of 2021 in comparison with the sooner reported 80.1 p.c. Similarly, the 2020 debt inventory has additionally diminished from 76.1 p.c to 74.4 p.c, an additional affirmation that the speed of debt accumulation has slowed to pre-pandemic ranges.

“As such, the Ministry of Finance will update its debt sustainability analysis (DSA) and revise its GDP projections for 2022 and the medium-term to reflect the positive developments in 2021 as well as recent policy decisions which have a bearing on sustaining the momentum towards robust economic growth,” a press release issued by the Finance Ministry on Wednesday April 27 mentioned.

“These developments are positive and confirm the fact that, the economy is rebounding post-COVID-19, the rate of debt accumulation is tapering off, and there is a slowdown in fiscal expansion with Ghana on track to return to the Fiscal Responsibility Act deficit threshold of 5 per cent of GDP by 2024,” the assertion added.