Ghana: GDP growth moderates in Q1
June 27, 2018
A provisional estimate released by Ghana’s Statistical Service on 27 June shows that the economy kicked off 2018 on softer footing. GDP expanded 6.8% annually in Q1, after clocking impressive growth rates in the second half of 2017 (Q3 2017: +9.7% year-on-year; Q4 2017: +8.1% yoy).
The slowdown was driven by a sizeable drop in industrial production growth, which slowed from 17.5% year-on-year in Q4 to 9.6%. Industrial production decelerated despite the sustained momentum in mining and quarrying output growth (Q1: +28.0% yoy; Q4 2017: +43.9% yoy) which came on the back of Ghana’s buoyant oil sector. In addition, agricultural output growth also decelerated markedly at the beginning of the year, coming in at 2.8% in annual terms in Q1 (Q4 2017: +8.5% yoy) due to weaker crops. Q1’s print marked the weakest readings for both the industry and agricultural sectors since Q4 2016.
The performance of the services sector, which accounted for just over 60% of GDP in Q1, was comparatively healthier, with the expansion in the first quarter (Q1: +5.2% yoy) markedly above Q4 2017’s 3.4% growth. Double-digit growth in the information and communication sub-sector led the expansion, offsetting a notable contraction in the finance and insurance sub-sector.
In quarter-on-quarter seasonally-adjusted terms, the economy expanded 1.5% in the first quarter, decelerating from the previous quarter’s 2.1% increase.
Looking ahead, the recovery should be sustained but moderate somewhat as the base effect from an increase in oil and gas production last continues to evaporate. Nevertheless, the continued expansion of the non-oil sectors and robust domestic demand amid easing inflationary pressures are projected to keep activity buoyant over the coming years.
Ghana GDP Forecast
FocusEconomics panelists expect GDP to expand 7.1% in 2018, which is down 0.2 percentage points from last month’s forecast, and 6.2% in 2019
Author: Almanas Stanapedis, Research Team Manager