The International Monetary Fund has revised Ghana’s growth rate for this year, from 4.2% to 4.6%, according to its latest updated World Economic Outlook Report.
The Fund also projected an impressive Gross Domestic Product (GDP) growth rate of 6.1% for next year. But these higher growth rates have not really translated into real jobs and rapid improvement of the livelihood of the people.
The Breton Wood however maintained its growth rate projection of 0.9% for last year though there are expectations that the GDP was higher.
According to the Fund, Ghana’s growth rate will be higher than Sub Saharan Africa’s regional average of 3.4% in 2021.
Data from the Bank of Ghana had indicated that the economy was on a rebound with a sustained momentum in pick-up in economic activity.
This follows an annual growth of 13.9% of the Bank of Ghana’s updated Composite Index of Economic Activity, the highest since December 2019.
The Finance Ministry has also projected a growth rate of 5.0% for this year.
This higher growth rate indicates that businesses will be able to generate more revenue from sales and probably expand into the future.
In the third quarter of last year, the agriculture sector was the only one that recorded a positive growth rate.
Sub Saharan Africa growth
The Fund said the covid-19 pandemic continues to exact a large toll on sub-Saharan Africa, especially Ghana, Kenya, Nigeria, South Africa.
“Following the largest contraction ever for the region (–1.9% in 2020), growth is expected to rebound to 3.4 percent in 2021, significantly lower than the trend anticipated before the pandemic. Tourism-reliant economies will likely be the most affected.”
Beyond 2022, the IMF said global growth is projected to moderate to 3.3% into the medium term. “Persistent damage to supply potential across both advanced and emerging market economies and slower labor force growth because of population aging (largely in advanced economies, but also in a few emerging market economies), and necessary rebalancing to a sustainable growth path in China, are all expected to weigh on the growth outlook for the global economy in the medium term.”
“GDP levels are projected to remain well below the pre-pandemic trend path through 2024 for most countries”, it emphasized.
Rising commodity prices
Consistent with the projected global recovery, oil prices are projected to grow 30% in 2021 from their low base in 2020, in part reflecting the OPEC+ (Organization of the Petrolleum Exporting Countries, including Russia and other non-OPEC oil exporters) supply curbs.
Metal prices are also projected to accelerate strongly in 2021, largely reflecting the rebound in China. Food prices are also expected to pick up this year.