Economy expands by GH¢8 billion in first quarter of the year

The Ghanaian economy expanded by GH¢8 billion in the first quarter of 2017, the Ghana Statistical Service (GSS) has revealed in its first quarter Gross Domestic Product (GDP) estimates report.

First quarter 2017 GDP at current prices was estimated at GH¢44.7 billion as against GH¢36.4 billion in quarter one 2016, an increase of 22.8 per cent.

"These are signs of some brisk economic activity,” an economist told this paper.

The Ghanaian economy grew by 6.6 percent in the first three months of 2017, compared with 4.4 percent during the same period last year.

The growth in GDP was driven by oil from the TEN oilfield as anticipated by some analysts.

Fitch for instance which had earlier forecasted a 6.3 per cent growth rate for Ghana for this year said oil production from the TEN oilfield will continue to boost export production and demand respectively.

“On the back of this, we expect that real GDP growth will reach 6.3 percent in 2017, increasing considerably from the 3.8 percent for 2016,” the ratings agency said.

This opinion by Fitch is shared by some economists who maintain that the economy has been growing faster than it did same time last year.

This is confirmed by the Bank of Ghana’s Composite Index of Economic Activity (CIEA) published in May this year which suggested a faster pickup in economic activity during the first quarter of 2017, relative to the same period last year.

“Growth in the CIEA was mainly driven by private sector credit and exports,” the Bank’s Monetary Policy Committee had said.

According to GSS, the services sector made up 59.0 per cent of the Ghanaian economy, approximately GH¢24.6 billion followed by the manufacturing sector, which constitutes 26.7 percent of the Ghanaian economy, approximately GH¢11.1 billion.

Importantly, the year-on-year quarterly GDP growth rate for Agriculture was 7.6 percent for the first quarter of 2017. The Fishing sub-sector recorded the highest year-on-year growth rate of 31.6 percent while the Forestry and Logging sub-sector recorded the lowest growth rate of 3.4 percent.

For industry, the year-on-year quarterly GDP growth rate was 11.5 percent for quarter one 2017. The Mining & Quarrying sub-sector recorded the highest year-on-year quarterly GDP growth rate of 32.8 percent for Q1 of 2017, while the Water & Sewerage sub-sector recorded the lowest of 0.9 percent.

For the first quarter of 2017, the services sector recorded a year-on-year quarterly GDP growth rate of 3.7 percent.

The Information & Communication sub-sector recorded the highest year-on-year quarterly GDP growth rate of 12.0 percent while the Public Administration, Defense & Social Security sub-sector recorded the lowest growth rate of -6.5 percent.

Interestingly, financial services and insurance activities grew by only 2.0 percent.

The constant GDP estimate (including oil) for quarter one of 2017 was GH¢8.5 billion while the estimate for the same period of 2016 was GH¢8.0 billion.

However, the constant GDP estimate (excluding oil) for quarter one of 2017 was GH¢7.9 billion. The value recorded for quarter one of 2016 was GH¢7.6 billion.

The growth in GDP would have been sustained over the long term if it had been driven by the Manufacturing and Agricultural sectors, some economists told this paper.