COVID-19 Blues: Ghana’s Economy Records First Contraction in 37 Years

Ken Ofori-Atta, Finance Minister with the Vice President, Dr Mahamudu Bawumia

Accra, Ghana, September 17, 2020//-Provisional figures released by the Ghana Statistical Service, GSS, show that for the first time in 37 years the Ghanaian economy contracted by 3.2%.

According to the same data, the country’s second quarter Gross Domestic Product (GDP), that is the value of goods and services produced from April to June, increased to GHS85.7 billion cedis, when compared to the GHS 84.3 billion cedis of value recorded for the same period in 2019.

Speaking to the media at a press briefing, Government Statistician, Prof. Samuel Kobina Annim attributed the fall to some restrictions on activities in the economy, which came to a standstill during the partial lockdown period.

“For the first time, in 37 years, Ghana’s economy has seen a contraction of 3.2%. Specifically, from a current prices point of view, the GDP estimates for the second quarter of 2020 was 85, 758.1 million Ghana cedis relative to 84, 312.0 million Ghana Cedis for the second quarter of 2019.

This increase in GDP is strictly from a current prices point of view and the influence of price changes over time is the main reason we are seeing the increase of about 1,446 million Ghana cedis,” he said.

He also said that the growth rate of the second quarter Gross Domestic Product when looked at on a quarter-on-quarter was negative 0.8%.

This means that the value of goods and services produced in the second quarter of 2020 contracted by 0.8% over the value of goods and services produced in first quarter of 2020.

When examined on a sectoral basis, Prof. Annim said that the information and communication sub-sector recorded the highest expansion of 74.2% whiles the hotels and restaurants sub-sector recorded the highest contraction of 79.4%.

He further noted that, the Agriculture sector which makes up 19 percent of all goods produced in the second quarter, saw a growth rate of 2.5 percent.

The services sector which makes up 48 percent witnessed a growth rate of negative 2.6 percent whiles the industry sector which makes up 33 percent of all goods and services produced saw a negative growth rate of 5.7 percent.

The Livestock sub-sector recorded the highest year-on-year growth rate of 5.7% in the agric sector whiles the forestry and logging sub-sector recorded the lowest GDP, with a contraction (-8.4%).

Quarter one GDP

According to the Ghana Statistical Service, the economy grew by 4.9% in the first quarter of 2020.

The services sector recorded the highest growth rate of 9.5% followed by the agriculture sector, which grew by 2.8% and the industry sector by 1.5%.

The main sub-sectors driving GDP growth in January to March 2020 GDP were information & communication, manufacturing, education and public administration & defence, social security.

Ghana’s economy records first contraction in 37 years

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