Business confidence softens in November, December 2019

Business confidence softened marginally on account of the exchange rate depreciation in November 2019.

However, businesses expressed positive sentiments about industry prospects and declining interest rates, going forward.

According to the Bank of Ghana’s latest confidence surveys conducted in December 2019, there was significant improvement in consumer confidence reflecting optimism about current and future economic conditions.

The Association of Ghana Industries Quarterly Barometer for 2019 also revealed that the Business confidence appears to be bouncing back from the previous quarter (Quarter One), rising from 99.8 to 103.2 points for Quarter Two (Q2).

Improved macro-economic conditions, consistent drop in inflation in Q2 and the uncertainty around the banking reforms frizzling out, might have gingered up business confidence, the report noted.

Nonetheless, high cost of raw materials, electricity and the current tax regime it said remained major constraints to growth of local industry.

Meanwhile, the Bank of Ghana, had said economic activity recorded high growth in the last two months of 2019, although at a slower pace than in 2018.

According to the Bank of Ghana’s updated Composite Index of Economic Activity (CIEA), it recorded 3.1 percent year-on-year growth in November 2019, compared with 4.8 percent in the same period of 2018.

This was mainly supported by port activity, domestic VAT, and Deposit Money Banks’ (DMBs) credit to the private sector, the Governor of the Bank of Ghana, Dr. Ernest Addison disclosed at the 92nd Monetary Policy Committee Press Conference.

Ghana’s economy recorded a GDP growth rate of 5.6% for the third quarter of 2019. It was the lowest growth recorded for last year.

Slump in growth in financial services, manufacturing and construction sub sectors among other sub sectors meant Ghana will miss its economic growth target of 7.1% in 2019.