Revised 2021 economic growth target achievable – analysts
Market analysts expressed optimism about the government’s ability to meet its revised economic growth target for 2021, given strong growth in the third quarter of last year thanks to continued strong economic momentum. economic activity in the fourth quarter amid the holiday season.
Ghana’s economy posted its best performance in the era of the pandemic, with gross domestic product (GDP) in the third quarter of 2021 growing by 6.6% year-on-year (y/y) compared to 5.1% in second quarter of 2021 and a contraction of 3.4% in the third quarter of 2020 respectively. On average, the first three quarters of 2021 posted a growth rate of 5.3%.
According to GDP figures from the Ghana Statistical Service (GSS), continued improvement in economic activities in the agriculture and services sectors continues to drive the recovery, although the industrial sector remains sluggish.
Sharing his views on the outlook for economic growth in an interview with B&FT, Databank Courage Senior Economist Kingsley Martey expressed optimism that the government will meet the revised 4.4% GDP target for 2021, based on the strong performance of the third quarter of 2021.
“Strong third quarter growth is encouraging and raises the prospect of meeting the revised 2021 target of 4.4%. full- an annual growth result above the revised target of 4.4%,” said Martey.
Apakan Securities Limited, in its analysis of third quarter economic growth, expressed optimism about a strong recovery of the economy in 2021, given the various growth-supporting policies implemented by monetary managers and budgets of the economy.
“Revised growth estimates from the Ghana Statistical Service also suggest that the government’s 4.4% target for growth in 2021 may be achievable after all if the current rate of recovery continues,” the company suggested. investment. “Along with the industrial sector, the third quarter data showed an improvement over previous quarters. We expect the sector to emerge from its recession by Q4-2021.
“However, global crude oil prices peaking around October could have a negative impact on year-end growth. inflationary pressures could have negative consequences on growth,” Apakan said cautiously.
The government, in its response to a Bloomberg article on the country’s debt situation, remained positive about continued strong momentum in economic activity during the fourth quarter of 2021.
“…given the strong underlying fundamentals of the Ghanaian economy and our rapid rebound from the effects of the COVID-19 pandemic, as evidenced by healthy GDP growth of 6.6% in the third quarter alone and an average of 5.2% for the first three quarters of 2021. While the year-end growth targets for 2021 have been revised to 4.4%, high-frequency indicators suggest a continuation of the strong momentum of economic activity in the fourth quarter,” the Department of Finance said in its response statement.
The ministry reassured investors that Ghana’s fundamentals remain strong as evidenced by growth performance in Q3-2021; the Ghana Revenue Authority exceeds its target in 2021; and a strong reserve position, at 4.9 months of import cover in November 2021.