Ghana’s Economy Deteriorates - Survey Reveals

An opinion poll conducted by one of the leading online websites, Ghanaweb, on the state of the economy depicts that Ghana’s economy is getting worse. According to the ongoing poll results, as at last week Friday June 29, 2012, 67.2 per cent of those polled said the economy was getting worse, 25.2 per cent claimed it was getting better while 7.6 per cent held the view that nothing had changed about the economy.

The question posted on the website was “Do you think the economy is getting worse, better or staying about the same?” In all, it attracted a total vote of 6,389 from the general public.

According to the information released, the results were indicative of those who visited the site and might not necessarily reflect public opinion. The latest Monetary Policy Committee report by the Bank of Ghana disclosed that the Consumer Confidence Index declined to 99.5 in May, from 102.8 in March 2012, driven by weaknesses in welfare sentiments though macroeconomic confidence. Similarly, the Business Confidence Index also decreased to 96.4 in March 2012, from 102.7 in December 2011. The weakening of business sentiments was influenced by inflationary expectations and exchange rate depreciation.

Headline inflation for May 2012 by the Ghana Statistical Service, increased to 9.3 per cent from 9.1 per cent in April 2012. This was attributed to increases in both food and non-food inflation.

During the first five months, the cedi depreciated cumulatively by 15.1 per cent against the US dollar, compared to 1.9 per cent depreciation in the same period of 2011. In recent weeks, however, the pace of depreciation of the cedi has moderated as a result of the measures introduced to restore stability. The real effective exchange rate depreciated by 6.8 per cent in January – April 2012, compared with a real appreciation of 5.9 per cent in the same period of 2011. The Gross International Reserves of the Bank of Ghana declined to $4.3 billion as at June 8, 2012, from $5.4 billion in December 2011. This is equivalent to 2.5 months imports cover of goods and services.