Consumer and business confidence in the Ghanaian economy has declined, according to the latest confidence surveys. These surveys indicated a “softening of consumer and business sentiments,” which aligns with trends in Ghana’s Purchasing Managers’ Index (PMI). The PMI fell below the 50.0 benchmark to 49.7 in June 2024, down from 51.6 in the previous month, as noted in the recent Monetary Policy Committee report by the Bank of Ghana.
Public complaints about the high cost of living, dwindling real income, and lower sales appear to be reflected in the Bank of Ghana survey. Additionally, lending to the private sector remains low, though there has been some improvement. The report indicated that “private sector credit extension steadily improved in the first half of the year.” In nominal terms, private sector credit grew by 17.6 percent in June 2024, compared to 16.1 percent growth in the same period in 2023. In real terms, the contraction in credit to the private sector moderated to 4.2 percent, compared to a contraction of 18.5 percent in June 2023”.
Interest rate trends were mixed at the short end of the market. The 91-day and 182-day Treasury bill rates increased to 24.91 percent and 26.84 percent, respectively, in June 2024, from 21.77 percent and 24.58 percent in June 2023. In contrast, rates on the 364-day instrument decreased to 27.83 percent from 28.66 percent over the same period.
On the interbank market, the Weighted Average Rate increased due to the tight monetary policy stance and sustained liquidity withdrawals from the market. The rate rose to 28.83 percent in June 2024, from 26.01 percent in June 2023. However, average lending rates of banks declined marginally to 31.10 percent from 31.15 percent over the same period.
