Ghana: GDP returns to growth in Q4, but records lowest growth since 2009 in 2020 overall
The economy rebounded in the fourth quarter of last year, growing 3.3% year-on-year according to national accounts data released on 21 April. The figure contrasted the 3.2% contraction logged in the third quarter and marked the first expansion since the start of the pandemic. Moreover, in seasonally-adjusted quarter-on-quarter terms, GDP rose 0.8% in Q4, swinging from the previous quarter’s 0.8% contraction. The fourth quarter’s figure brought annual growth for 2020 as whole to 0.4%, marking a significant moderation from the 6.6% expansion logged in 2019 and the lowest reading in 11 years.
Q4’s bounce-back to growth largely reflected a softer contraction in the industrial sector (Q4: -0.4% yoy; Q3: -7.2% yoy), as well as a rebound in the services sector (Q4: +4.6% yoy; Q3: -3.3% yoy) and stronger growth in the agricultural sector (Q4: +8.2% yoy; Q3: +4.9% yoy). The services sector likely benefited significantly from more moderate Covid-19 restrictions during the quarter, while industrial output was bolstered by the manufacturing and construction subsectors.
Looking ahead, as the impact of the pandemic subsides, the economy is projected to gain steam on the back of recovering domestic and foreign demand. The industrial and services sectors are likely to benefit from easing restrictions and should continue to spearhead economic growth. That said, downside risks such as a slow vaccine rollout and volatile commodity prices continue to cloud the outlook.