Ghana’s economy contracted by 3.2 percent in the second quarter of this year, a decline from the 5.7 percentage growth recorded during the same period in 2019.
This represents the first time the economy has contracted in 37 years, since 1983.
At a press briefing, Government Statistician, Prof. Samuel Kobina Annim attributed the fall to some restrictions on activities in the economy, which came to a standstill during the partial lockdown period.
The country’s second quarter Gross Domestic Product (GDP), at current prices, that is the value of goods and services produced from April to June, increased to GHc 85.7 billion, when compared to the GHc 84.3 billion of value recorded for the same period in 2019.
“For the first time, in 37 years, Ghana’s economy has seen a contraction of 3.2 percent. Specifically, from a current prices point of view, the GDP estimates for the second quarter of 2020 was GHc 85,758.1 million relatives to GHc 84,312.0 million for the second quarter of 2019. This increase in GDP is strictly from a current prices point of view and the influence of price changes over time is the main reason we are seeing the increase of about GHc 1,446 million,” Prof. Annim said.
However, in real terms, the 2020 quarter two GDP was estimated at GHc 38,670.3 million compared to GHc 39,952.6 million for the same period in 2019.
The BoG’s Composite Index of Economic Activity (CIEA), measured on a year on year basis, contracted sharply in May 2020 by 10.6 percent. This is a complete reversal of the 5.6 percent growth in the index recorded over the previous 12-month period.
While the CIEA is not a direct measure of economic growth – it tracks changes in the amount of economic activity, as different from measuring changes in value added, which the Ghana Statistical Service uses for the official measurement of Gross Domestic Product growth – the two have tended to be quite closely correlated, rarely deviating from each other by much more than 100 basis points (one percentage point).
On a sectoral basis, the information and communication sub-sector recorded the highest expansion of 74.2 percent whiles the hotels and restaurants sub-sector recorded the highest contraction of 79.4 percent.
The services sector which makes up 48 percent witnessed a growth rate of negative 2.6 percent whiles the industry sector which makes up 33 percent of all goods and services produced saw a negative growth rate of 5.7 percent.
The Agriculture sector which makes up 19 percent of all goods produced in the second quarter, saw a growth rate of 2.5 percent. The Livestock sub-sector recorded the highest year-on-year growth rate of 5.7 percent in the agric sector whiles the forestry and logging sub-sector recorded the lowest GDP, with a contraction (-8.4 percent).