Economy bouncing back rapidly after easing of restrictions – Deputy BoG Governor

The First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari, has said the Ghanaian economy is recovering quickly after the lift of restrictions following the outbreak of the coronavirus pandemic.

He said “what we have seen at the Central Bank and one of the advantages we have is to have access to what we call High Frequency Leading Indicators. Putting all those High-Frequency Leading Indicators together, we have been able to put together what we call the Composite Index of Economic Activity which helps us track short-term dynamics in economic activities and gives us a sense of where economic activity is going to.

“Even though we saw a contraction in the second quarter, the data that we are picking from the Composite Index Economic Activity and High-Frequency data including credit to the private sector, manufacturing, sales, and a few other things shows that we are beginning to see some significant recovery already in the first few months of the third quarter up to September and in fact throughout the third quarter,” he noted in an interview with Accra-based Mx24 TV.

Ghana’s economy as a result of the novel coronavirus pandemic contracted by 3.2 percent this year against the 5.7 percent recorded in the same period last year. The virus which led to a three-week lockdown of major parts of the country in March forced many businesses to close.

“This recovery is quite significant to the extent that we think that growth will be positive in the third quarter. If you put it that way, then the leading indicators is pointing to what we will call a V-shaped recovery because of the significant negative impact we expected as a result of the lockdown as we expected the restrictions to be prolonged but we saw that there was a gradual lifting of those restrictions.”

“This meant that the impact on economic activities had not been as severe even though it is a contraction because -3.2 is not a small contraction but to have a turnaround in the third quarter shows that the recovery is going to be more of a V-shape than a U or a trapezoid,” he added.