Home | Goldstreet Business
Saturday, June 25, 2022
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
Gold Business Logo
No Result
View All Result
Home Business Banking and Finance

New data indicates 4th qtr 2020 economic rebound

February 15, 2021
in Banking and Finance, Opinion, Top Stories
0
Bank lending rates falling
Share on FacebookShare on Twitter

…but sustainability is uncertain because of COVID 19 resurgence

New data released by the Bank of Ghana suggests that Ghana’s economy may have begun a rebound from the contractions it suffered during the second and third quarters of 2020 as a result of the adverse impact of COVID 19 and the requisite socio-economic restrictions imposed by government to curb the spread of infection. The central bank’s Composite Index of Economic Activity grew strongly during the last quarter of 2020 and although the usual close correlation between the CIEA and Gross Domestic Product measurements conducted by the Ghana Statistical Service have loosened somewhat since the advent of the coronavirus pandemic, the sheer strength of the CIEA’s rise suggests that Ghana enjoyed a resumption of economic growth during the period.

RELATED POSTS

AfDB prepares $28m post COVID-19 programme for Ghana

India-Ghana friendship centre in the Offing – India High Commissioner

However,  the resurgence of COVID 19 and the requisite re-imposed restrictions threatens to be a dampener, on both economic activity and the underlying business and consumer confidence that drives it, although Ghana’s financial markets are showing defiance – interest rates continue to fall despite the BoG putting further monetary easing on hold for now; forward foreign exchange auctions conducted fortnightly by the central bank indicate confidence by forex users and their bankers that the cedi’s exchange rate will continue to hold steady at least over the next two months; and equities listed on  the Ghana Stock Exchange have started enjoying a price surge after an unprecedented three consecutive years of bearish sentiment which have left many stocks fundamentally undervalued.

According to the latest BoG surveys “consumer confidence has remained firm at pre-lock down levels, reflecting optimism about current economic conditions following the gradual lifting of COVID- related restrictions.” The snag is that this survey was conducted before restrictions started being re-introduced and their re-introduction will push consumer sentiment in the other direction, a trend which will reflect in the next survey, the results of which will not be announced until late March, even though the sentiments are already in play now,

The latest BoG survey on business confidence also reveals that it has “increased significantly, reaching pre-lock down levels for the first time as businesses meet their short term company targets and have expressed positive sentiments about growth prospects.”  Again, the circumstances have changed significantly since this survey was conducted but, as with consumer confidence, the results will not be revealed until late March.

Underlying all this are the actual economic outcomes. The BoG’s Composite Index of Economic Activity surged by 11.4 percent year on year up to November 2020, three and a half times the growth recorded over the previous 12 month period. This suggests strong economic growth; the CIEA tracks economic activity while the GDP growth data from the GSS tracks changes in the size of the economy, but since the two are correlated both tend to move in the same direction albeit at different paces.

But the peculiar circumstances created by COVID 19’s impact have loosened the correlation somewhat; instructively, the CIEA results announced in November revealed that economic activity was increasing but the GSS subsequently announced a 1.1 percent economic contraction for the third quarter.  Nevertheless the sheer quantum of upward movement in the CIEA most recently strongly suggests that Ghana will record positive GDP growth for the last quarter of 2020, no matter how marginal.

Over the past fortnight, the conventional wisdom that Ghana is in the early stages of a sustained economic rebound after two successive quarters of economic contraction  during 2020,is increasingly being called into question. Initial data emergent since late November indicating the start of a second wave of COVID 19 infections was not widely perturbing, ostensibly because both the political class and the electorate were all caught up in the excitement of the then impending December 7 elections.

However all that changed three weeks ago ago when President Nana Akufo Addo, in a televised address to the nation announced the re-introduction of limited restrictions on social activity, threatening further restrictions if Ghanaians failed to observe COVID 19 safety protocols. With the general populace having become notorious over the past nine months for refusing to comply with those protocols, public policy analysts and commentators are predicting more restrictions imminently, possibly culminating in an outright second lock down.

This has changed the outlook for Ghana’s economy in 2021; even the Bank of Ghana which has been one of the most enthusiastic believers in a quick economic rebound now warns that under the unfolding circumstances, fiscal consolidation will take longer than originally anticipated. By extension, so will its benefits.

Actually, even the generally accepted belief that an economic rebound has started since the fourth quarter of 2020 has not yet been confirmed by data. After the economy suffered an unprecedented 3.2 percent contraction in Gross Domestic Product, measured in year on year terms, during the second quarter of the year, following a wide range of socio-economic restrictions to curb the spread of COVID 19 including an outright lock down of the country’s two biggest economic hubs for three weeks in April, the BOG forecast that a rebound would commence in the subsequent quarter, this projection based on early data received by the central bank.

But this did not happen. During the third quarter of last year the economy contracted again, albeit by a slower rate of 1.1 percent. This forced the BoG to revise its full year growth forecast downwards, from the 2.0 – 2.5 percent it had forecast in late September; by late November, having received the third quarter growth data from the Ghana Statistical Service, it announced that it expected growth of about one percent, roughly in line with the 0;9 percent forecast made by the Ministry of Finance in its mid year budget review presentation to Parliament, made in July.

But even this is uncertain; the fourth quarter data has not yet been released by the GSS and there is still the possibility that it will be disappointing, like the third quarter data that preceded it. If that happens and growth for the last quarter of the year turns out to be negative, or even just flat, Ghana could officially be termed to be in a recession – the formal definition of a recession is three consecutive quarters of negative growth.

This is highly unlikely though; the latest data from the BoG points to a rebound at the end of 2020, the challenge though is how to sustain it through a resurgence of both the COVID 19 pandemic itself and the consequent re-imposition of socio-economic restrictions. 

facebookShare on Facebook
TwitterTweet
Source: By Toma Imirhe
Tags: BoG
ShareTweetShare

Related Posts

African Development Bank Group unveils US$10bn COVID-19 Response Facility

AfDB prepares $28m post COVID-19 programme for Ghana

June 21, 2022
India-Ghana friendship centre in the Offing – India High Commissioner

India-Ghana friendship centre in the Offing – India High Commissioner

June 21, 2022
Going to IMF will worsen plight of Ghanaians; Home-grown programme is way to go – TUC

Going to IMF will worsen plight of Ghanaians; Home-grown programme is way to go – TUC

June 21, 2022
Prasad Gerapati Appointed Chairman Of Inter Tourism Expo Accra

Prasad Gerapati Appointed Chairman Of Inter Tourism Expo Accra

June 15, 2022
Noise Pollution and why you need to listen to this!

Noise Pollution and why you need to listen to this!

June 13, 2022
Next Post

Ghana’s financial markets are showing strong resilience against the economic impacts of COVID 19’s second wave

Government focused on creating enabling environment for businesses to thrive

Discussion about this post

Archives

<
June 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
▼
>
MonTueWedThuFriSatSun
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
 123456
78910111213
14151617181920
21222324252627
28      
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
1234567
891011121314
15161718192021
22232425262728
       
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
     12
3456789
10111213141516
17181920212223
242526272829 
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
    123
45678910
11121314151617
18192021222324
25262728   
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       

RECOMMENDED

African Development Bank Group unveils US$10bn COVID-19 Response Facility

AfDB prepares $28m post COVID-19 programme for Ghana

June 21, 2022
India-Ghana friendship centre in the Offing – India High Commissioner

India-Ghana friendship centre in the Offing – India High Commissioner

June 21, 2022

MOST VIEWED

Plugin Install : Popular Post Widget need JNews - View Counter to be installed
  • Energy
  • Health
  • Auto
  • International
  • Subscription Form
  • Staff Webmail
  • About Us
  • Contact Us
Call us: +233 24 432 0902 | info@goldstreetbusiness.com

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

No Result
View All Result
  • Homepages
    • Homepage Layout 1
    • Homepage Layout 2
  • World
  • Business
  • Technology
  • Health

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.