A Report by the African Markets Revealed (AMR) has predicted Ghana’s GDP to grow to 7.4% in 2021. This implies an acceleration from the estimated 6.9 percent to 7.4 percent. The report was prepared by economists of The Standard Bank, owners of Stanbic Bank in Ghana
Ghana’s GDP growth forecast, according to the report is as a result of activities of export-oriented sectors of the economy. These sectors are also likely to be the main driver of growth in the economy for the next two to three years.
“We maintain our constructive view regarding the economic growth outlook for Ghana in the medium term”.
“We continue to highlight the probable boost that the export-oriented sectors of the economy will likely provide to the overall economic growth over the course of the next 2-3 years”, the report said.
Again, the AMR indicated that the downward trend in growth as experienced in the sector in 2019 is expected continue this year..
The report also predicts that Ghana’s GDP growth in the mining sector will decline. But it also added that it expects the Obuasi Gold mine, which has resumed production again to provide some support to the mining sector this year.
Thus, the report stated, “While up to now the deceleration in growth of the mining and quarrying sector has not been attributable to the oil sector, there is a risk that this sector might decelerate this year”.
It also added that “given that the oil sector grew strongly in the first 3 quarters of 2019, mining was likely the main culprit in the deceleration of the mining and quarrying sector.”
In line with this, it predicted an economic boost for the country this year despite the risk factors that are mainly occasioned by a lack of fiscal discipline in election years.
Meanwhile, on the exchange rate front, the report forecasted that the cedi will depreciate against the major trading currencies in the world.
The report predicts that the local currency will end at GHS5.85 to a dollar in the first quarter and at GHS6.00 to the dollar at the end of the second quarter.
“Depreciation seems inevitable this year; the only question is the magnitude. We expect USD/GHS to end Q1:20 at 5.85 and Q2:20 at 6.00.
“In recent months, the BoG has been steadfast in intervening to restrain the depreciation trend. Just as last year, it is likely that the BOG will rely on government issuance of Eurobonds to provide it with the ammunition to intervene in the forex market”, it said.
The African Markets Reveal is a monthly report issued by the Standard Bank Group, parent company of Stanbic Bank Ghana and focuses on the economic and financial outlook of African countries.
The report also reviews current economic situations and makes short to medium-term predictions about the economies of African countries.