Economic expansion likely to hit 5% by end of year as Q2 records 3.9%

An Economist at the Institute of Statistical, Social and Economic Research (ISSER) is predicting an end of year economic growth rate of five percent.

Professor Peter Quartey, has described the 3.9% GDP growth in the second quarter of 2021 announced by the Ghana Statistical Service, last week, as ‘encouraging’.

The 5% projection is slightly above the IMF projection of 4.6% growth in real GDP, the 4.2% projection by the World Bank and also the 4% percent projection published in the 2021 African Economic Outlook by the African Development Bank. But, the ISSER Director believes that the GSS data demonstrate signs of economic recovery amidst the Coronavirus pandemic.

“All things being equal, we are likely to hit an average of 5% GDP by the end of the year”,  Professor Peter Quartey said in his comment after the GSS announcement.

“The 3.9% growth rate is quite positive and encouraging. Then if you even look at the non-oil growth rate of 5.2%, it clearly tells you that the economy is certainly recovering.

“I’m encouraged by the fact that manufacturing is growing at an average rate of 5% because majority of the people are employed within this sector. And therefore, it is quite encouraging that if that sector is growing it is likely to employ more people, so we reduce the unemployment rate, especially the youth who are unemployed – a lot of them being trained by the tertiary institutions, but yet cannot find jobs,” Prof. Quartey explained.

He, however, urged government to place key focus on making targeted investments in critical sectors to sustain the growth of the economy.

“That is positive and I think they [government] should continue to invest in the real sector in order to realise targeted growth rate for 2021,” he added.

Meanwhile, the economic expansion witnessed in the second quarter of 2021 compared to the more than 5 percentage points of contraction experienced in the same for 2020.

When seasonally adjusted, Ghana’s real GDP increased by 0.9 percent in the second quarter, that is, April to June. It witnessed 0.1 percentage point higher than what was recorded in quarter one of the year.

According to Government Statistician, Prof. Samuel Anim, the Services Sector influenced the growth recorded for the period.

Provisional real quarterly gross domestic product (QGDP) growth rate including Oil and Gas, is 3.9% (year on year) in the second quarter of 2021. In the same period of 2020, the growth was -5.7%.

GDP growth rate without oil and gas (Non-Oil GDP) for first quarter 2021 is 5.2% which compares to the same period in 2020 with a growth rate of -5.8%.

The Service sector recorded the highest growth of 11.0% and was followed by the Agriculture sector with a growth of 5.5.0%. The Industry sector contracted by 4.3 percent.

The GDP (Including Oil & Gas) estimate at constant 2013 prices for the 2nd quarter of 2021 was GH¢39,162.2 million compared to GH¢37,710.3 million in the 2nd quarter of 2020.

The Non-oil GDP at constant 2013 prices for the 2nd quarter of 2021 was GH¢36,369.9 million compared to GH¢34,580.9 million in the 2nd quarter of 2020.

The GDP estimate at current prices in purchaser’s value for the 2nd quarter of 2021 was GH¢101,945.7 million compared to GH¢88,470.1 million in the 2nd quarter of 2020.

The Non-oil GDP (GDP without Oil and Gas) estimate at current prices for the 2nd quarter of 2021 was GH¢97,489.6 million compared to GH¢85,661.5 million in the 2nd quarter of 2020.

The Services sector was the largest sector of the Ghanaian economy in the second quarter of 2021 with a share of 50 percent of GDP at basic prices. The GDP share of Industry and Agriculture were 29 percent and 21 percent respectively.

The Provisional quarter-on-quarter seasonally adjusted Real Gross Domestic Product (including Oil) growth rate for the 2nd quarter of 2021 was 0.9 percent.

Within the Agriculture sector, the Crops sub-sector grew by 0.9 percent in the 2nd quarter of 2021, compared to 1.4 percent in the 1st quarter of 2021. The Livestock subsector also grew by 1.2 percent compared to 1.3 percent recorded in the 1st quarter of 2021. The Forestry and Logging subsector grew by 2.9 percent compared to 0.1 percent recorded in the 1st quarter of 2021.

The Fishing sub-sector expanded by 3.1 percent compared to a contraction of 0.9 percent recorded in the 1st quarter of 2021   Within the Industry sector, the Construction sub-sector recorded a 0.6 percent growth in the 2nd quarter of 2021, compared to a 3.5 percent expansion recorded in the 1st quarter of 2021.

Manufacturing sub-sector grew by 1.8 percent in the 2nd quarter of 2021 compared to a growth of 2.0 percent in the 1st quarter of 2021. Water Supply, Sewerage, Waste Management & Remediation Activities sub-sector grew by 5.1 percent in the 2nd quarter of 2021, compared to a growth of 1.6 percent in the 1st quarter of 2021.

The Mining & Quarrying sub-sector continued to contract by 4.8 percent in the 2nd quarter of 2021, from -2.6 percent recorded in the 1st quarter of 2021   In the Services sector, Real Estate grew by 1.7 percent in the 2nd quarter of 2021 compared with 2.4 percent growth in 2021Q1.

Information & Communication expanded by 4.3 percent growth rate in the 2nd quarter of 2021, same as recorded in 1st quarter of 2021. The Trade; Repair of Vehicles, Household Goods also grew to 2.2 percent in the 2nd quarter of 2021 compared to a growth of 0.8 percent in the 1st quarter of 2021. Compared to 1st quarter of 2021, the Public Administration & Defense, Social Security grew by 2.7 percent in 2021Q2.

Hotel & Restaurants and Professional, Administrative & Support activities which contracted in the 1st quarter of 2021, expanded by 1.8 percent in the 2nd quarter of 2021.

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