Fitch Solutions has forecast that Ghana’s economy will grow by 5.5% in 2024, marking a three-year high. This growth represents a significant jump from the 2.9% recorded in 2023.
The strong performance in 2024 is largely attributed to increased industrial output, particularly in mining, quarrying, and a recovery in the construction sector. Furthermore, private consumption and exports played a pivotal role, with an 8.5% rise in consumer spending and a 12.6% increase in exports during the first half of the year.
In fact, one of the biggest factors contributing to the acceleration of growth in quarter 2, 2024, according to an analysis published by the UK-based rating agency, was factors such as stronger industrial output, bolstered by mining and quarrying, as well as continued recovery in construction.
As oil production recovered in the first half of 2024, exports surged in the second quarter mainly as a result of solid growth in international oil sales. However, this recovery appears to have hit its peak, leading to moderating growth rates in the latter half of the year and thereby capping export growth.
“We think that private consumption growth will moderate over the remainder of the year. As a result of rapidly rising inflation, consumer activity ground to a halt in 2022 and started making a recovery in 2023. As private consumption expanded by a strong 18.7% and 19.2% year-on-year in quarter 3 and quarter 4 2023 respectively, this will create a high base from which to grow, resulting in lower growth rates in the second-half of 2024,” Fitch speculated.
In expenditure terms, stronger growth in quarter 2, 2024 was bolstered by an 8.5% increase in private consumption and a 12.6% rise in exports. However, Fitch expects this growth to decelerate in the latter half of 2024 due to the anticipated decline in export growth, as the recovery in oil production is likely to have peaked. Additionally, private consumption is expected to moderate after strong gains in 2023.
