Ghana: Growth momentum maintained in Q4
April 11, 2018
A provisional estimate released by Ghana’s Statistical Service on 11 April shows that the economy finished last year on strong footing. GDP expanded 8.1% in annual terms in the final quarter of 2017, decelerating slightly from the previous quarter’s multi-year high of 9.7%. As a result, in 2017 the Ghanaian economy surged 8.5%, the highest pace in five years and more than double the previous year’s rate of 3.7%.
The breakdown of the fourth quarter results confirms that that the industrial sector continued to drive the overall economy in the period. Industrial production growth accelerated to 17.5% year-on-year in Q4 (Q3: +16.6% yoy) on the back of astonishing growth of mining and quarrying output, which rose 43.9% year-on-year in the quarter (Q3: +40.8% yoy). Meanwhile, agricultural output increased 8.5% in annual terms in Q4 (Q3: +10.0% yoy), led by a robust 9.7% increase in the yield of crops.
The performance of the services sector was comparatively more moderate, with a marginal expansion in the fourth quarter (Q4: +3.4% yoy) that was notably below Q3’s 5.7% growth. Robust double-digit growth in several sub-sectors, including health and social work; education; and information and communication, was nearly completely offset by meager expansions in the finance and insurance; trade and repair of vehicles; and household goods sub-sectors, as well as a contraction in the public administration, defense and social security category.
Looking ahead, the strength of the oil sector will be key to sustaining robust economic growth in 2018; oil production jumped around 80.0% in 2017, with oil and gas quoted as the key driver of economic growth by government officials. Nevertheless, continued expansion of non-oil sectors, an anticipated moderation of inflationary pressures, and a continued commitment to narrowing deficit and debt levels will all be instrumental to spurring sustainable economic growth in the short and medium term.
Author: Almanas Stanapedis, Economist