Economy to reach gradual path to recovery in 2024, but lower than pre-pandemic average – Fitch Solutions

November 22, 2023 / Comments (0)

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Fitch Solutions has reiterated that Ghana’s economy will reach the gradual path to recovery in 2024.

However, growth will remain below its pre-pandemic average of about 5%.

The UK-based firm is projecting a Gross Domestic Product (GDP) growth of nearly 4.0% in 2024.

It insisted that Ghana’s growth rate in 2023 will be about 2.8%.

In disclosed in its latest Sub-Saharan Africa Macroeconomic Update that rapidly moderating inflation will support domestic demand in Ghana, whilst the cedi will pare back some losses on debt restructuring deal.

“The worst is now behind Ghana. We have seen greater exchange rate stability over the past couple of months. Inflation is coming down. The government has been implementing fiscal consolidation measures and the authorities are in talks with commercial and official creditors to restructure a large chunk of the nation’s external debt”, Senior Analyst for Sub-Saharan Africa at Fitch Solutions, Mike Kruiniger said.

“However, the economic growth outlook for 2024 remains muted as we forecast GDP to expand by 3.7% next and yes this is better than the projected 3.0% in 2023 but still below Ghana’s 2015-2019 average”, he explained.

He stated that there are a couple of reasons why it remain relatively bearish on Ghana’s 2024 outlook.

“Reason number one here is still elevated inflation; so whilst inflation will remain on the downtrend it will remain elevated for the majority of the year, particularly in the first half of 2024. What this means is that purchasing power will be under pressure which will limit domestic consumption and create headwinds to business activities”.

“Reason number two is restrictive monetary policy”, Mr. Kruiniger concluded.


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