IMF forecasts growth rate of 0.9% for Ghana in 2020

Uncertainty over how Ghana’s growth will pan out for 2020 has increased with the International Monetary Fund releasing an economic growth forecast of 0.9 percent for the country this year, according to its October 2020 World Economic Outlook Report.

This matches the growth forecast made by Ghana’s own Ministry of Finance in its 2020 mid-year budget review and revision as presented to Parliament by Finance Minister Ken Ofori Atta. However it is slightly lower than the 1.3 percent of Gross Domestic Product growth forecast made recently by the World Bank, and also by Fitch Ratings; and less than half of the latest revised forecast of between 2.0 percent and 2.5 percent announced by the Bank of Ghana at the end of its latest Monetary Policy Committee meeting in Accra at the end of September.

So far, most business chieftains in Ghana are optimistically opting for the Bank of Ghana’s forecast on the grounds that it is the latest from an institution on the ground in Ghana with access to the latest high frequency data. Indeed, there are expectations that the Finance Ministry will shortly announce a higher, revised forecast since it has access to the same data as the BoG and indeed collaborates closely with it with regards to economic management.

Instructively, the latest Composite Index of Economic Activity data released by the central bank, covering the 12 month period up to July indicates a year on year rise of 3.2 percent, reversing the sharp 10.6 percent contraction in the index recorded for May, which indeed served as a forewarning for the 3.4 percent economic contraction actually recorded by the Ghana Statistical Service for the second quarter of this year.

Despite the varying growth forecasts for this year, all the institutions seem to be in agreement that Ghana will outperform most of the rest of the African continent

With the exception of Ivory Coast (1.8 percent), Ethiopia (1.9 percent), Kenya (1.0 percent) and Tanzania (1.9 percent), the country will outperform the other 46 Sub Saharan African countries, the IMF believes. Instructively if the BoG ‘s revised forecast turns out to be right, Ghana could emerge as the overall best performer in sub Saharan Africa this year.

Growth on the continent as a whole is expected to contract by 3.0 percent with both South Africa (-8.0 percent) and Nigeria (-4.3 percent) recording huge negative growth rates.