Government targets 5.8 per cent GDP growth in 2022

Government targets 5.8 per cent GDP growth in 2022

Ghana is aiming for a 5.8 per cent post-Covid economic growth rate in 2022, which is lower than the IMF’s forecast of 6.2 per cent.

On Wednesday, November 17, when presenting the 2022 budget and economic policy to Parliament, Finance Minister Ken Ofori-Atta stated that the government expects total Real GDP growth of 5.8%.

Non-oil real GDP growth is predicted to be 5.9%, with an end-of-year inflation rate of 8% and a 7.4% budget deficit.

The revised forecast outperforms the IMF’s forecast of 3.8 per cent for Sub-Saharan Africa in 2022, published in the “One Planet, Two Worlds, Three Stories” Regional Economic Outlook for Sub-Saharan Africa in October 2021

Ghana’s goal is also greater than the World Bank’s 2022 projection.

According to the Bretton Woods Institute, the GDP would rise by 5.5 per cent in 2022, owing to strong export growth.

The report acknowledged that “Ghana is projected to exhibit growth of, respectively, 4.9% and 5.5% in 2021 and 2022, reflecting strong growth in exports. The economy performed relatively well despite the outbreak of the Delta variant thanks to the fiscal support by the government”.

The higher growth rate suggests that businesses will be able to generate more revenue from sales and expand in the future.

However, these higher growth rates have not translated into actual jobs or a rapid improvement in people’s living standards.

The Finance Minister’s announcement backs up the Bank of Ghana’s data, which shows an increase in economic activity.

In relation to the September 2021 Monetary Policy Committee Report, the BoG said its “Composite Index of Economic Activity (CIEA) for July 2021 reflected a continued recovery in domestic economic activity. The real CIEA recorded a 20.0% year-on-year growth in July 2021, compared with 20.2% in June 2021, and 3.9%t growth in July 2020. The growth in the indicators were somewhat broad-based with port activity, imports, domestic VAT, and air-passenger arrivals accounting for the increase.”

According to the Ghana Statistical Service, yearly GDP growth increased to 3.9 per cent in the second quarter of 2021, up from 3.1 per cent in the first quarter and a 5.7 per cent decrease in the same period of 2020. Non-oil GDP increased by 5.2 per cent in the same time, compared to a contraction of 5.8 per cent in the same period in 2020.

Source: Richard Mensah Adonu | Join our Telegram Group

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