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Financial sector returns to strong growth in Q1 - GSS

GSS The Ghana Statistical Service

Thu, 18 Jun 2020 Source: classfmonline.com

The Finance and Insurance sub-sector returned to a strong positive growth path after recording very low and negative growth rates for about three consecutive years.

According to figures from the Ghana Statistical Service (GSS), the sub-sector grew by 6.9% in the first quarter of 2020, higher than the national average of 4.9%.

The finance and insurance sub-sector grew at a rate of-17.75 and -8.2% in 2017 and 2018 respectively.

It, however, returned to a positive trajectory but at a very low growth rate. It grew at a rate of 1.6% in 2019.

The financial industry [banks, savings & loans, microfinance, finance houses and investment firms] had suffered from some bankruptcies or insolvency for about three years triggered by misapplication and misappropriation of funds.

According to the May 2020 Banking Sector Development Report, the industry remained sufficiently profitable during the first quarter of 2020 despite increases in operational costs.

The profit-after-tax outturn of GH¢960.40 million in Quarter One (Q1) 2020 represented a growth of 16.3%, less than half of the 37.3% growth recorded in Q12019 due mainly to a sharp increase in operational expenses.

Growth in net interest income marginally declined to 19.2% at the end of March 2020 from 20.8% a year earlier. This was due to the 11.1% growth in interest expenses on the back of increased level of borrowings and term deposits.

Net fees and commissions, on the other hand, grew strongly at 16.0% from 3.6 per cent due in part to increased usage of electronic banking services in the wake of the COVID-19 pandemic.

Ghana’s economy grew by 4.9% in quarter one of 2020, provisional figures from the Ghana Statistical Service has revealed.

This is compared to a growth rate of 6% of the Gross Domestic Product during the same period in 2019.

According to the GSS, the services sector recorded the highest growth rate of 9.5% followed by the agriculture sector, which expanded by 2.8% and the industry sector by 1.5%.

The main sub-sectors driving GDP growth in January to March 2020 GDP were information & communication, manufacturing, education and public administration & defence, social security.

Source: classfmonline.com