Ghana: Economy records blistering pace of growth in Q2
September 26, 2017
According to a provisional estimate from the Ghana Statistical Service, GDP growth came in at 9.0% year-on-year in Q2, up from 6.6% in Q1 and marking the strongest quarterly figure since Q3 2014. However, it should be noted that Q2’s figure was likely boosted by a very weak reading in the corresponding period of the previous year, as a result of a temporary halt in oil production caused by a technical fault.
Q2’s increase was broad-based, with industry leading the way (Q2: +19.3% yoy; Q1: +11.6% yoy, previously reported: +11.5% yoy) thanks to a standout performance from the oil and gas sub-sector. Growth in the services sector also accelerated in the second quarter (Q2: +5.6% yoy; Q1: +3.4% yoy, previously reported +3.7% yoy), due mainly to larger expansions in the information and communication, and health and social work sub-sectors. However, growth in agriculture slowed on the back of a decline in fishing production (Q2: 3.4% yoy; Q1: +7.7% yoy, previously reported +7.6% yoy).
Looking ahead, the pace of growth observed in Q2 is unlikely to be repeated, although the economy should continue to expand at a strong rate. Higher oil production from the TEN field could have positive spillover effects on other economic sectors, while the recent one-year extension of the IMF’s financial assistance program should help anchor investor confidence. However, the economy continues to be held back by a precarious fiscal position and a weak energy sector with highly indebted State-Owned Enterprises (SOEs).
Author: Oliver Reynolds, Economist