Economic activities rebounding, outlook better – BoG

Economic activities in Ghana is rebounding strongly, the Monetary Policy Report of the Bank of Ghana has revealed.

It said economic growth was relatively strong in the first half of 2023 as the latest data released by the Ghana Statistical Service showed that real Gross Domestic Product (GDP) growth at 3.2% in the second quarter of 2023, marginally down from 3.3% in the first quarter.

The observed growth outturn was largely driven by the services and agriculture sectors, which grew by 6.3% and 6.0% respectively.

The MPC report also stated that the exchange rate is stabilising, while inflation is declining.

Again, the level of foreign exchange reserves has improved.

This is reflected in the recent S&P Global Purchasing Managers Index (PMI) that signaled a better private sector business environment in Ghana.

The S&P index for Ghana increased from 50.5 in July to 51.9 in August, as output and new orders sharply increased.

It stressed that employment grew for a ninth straight month, and supplier delivery times shortened.

Commenting, the Governor of the Bank of Ghana, Dr. Ernest Addison, said “sustained improvement in these economic indicators should result in the restoration of real incomes and purchasing power”.

Also, trends in the Central Bank’s high frequency real sector indicators also pointed to a sustained turnaround in economic activity.

The updated Real Composite Index of Economic Activity (CIEA) contracted at a slower pace by 2.8% year-on-year in July 2023, indicating a slight improvement from a contraction of 3.1% in June 2023 and 3.7% in May 2023.

The main indicators that contributed to the slight recovery in the Index during the period were industrial consumption of electricity, private sector contributions to Social Security, and tourist arrivals. Credit to the private sector, cement sales, and port activity, however, slowed down over the period.

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