In the domestic economy, the Ghana Statistical Service(GSS), reported an estimated GDP
growth of 3.1 percent for the first quarter of 2021, yet another sign of strong recovery
from the impact of the pandemic, even though still lower than the pre-pandemic
growth of 7.0 percent recorded for the first quarter of 2020, Governor of the Bank of Ghana Dr Ernest Addison has said.
Non-oil GDP grew at 4.6percent, from 7.9 percent growth in the same comparative period, he said.
Beyond the first quarter GDP outturn, high frequency economic indicators for the second quarter of the year point to a sharp pickup in economic activity relative to last year.
The Bank’s updated Composite Index of Economic Activity (CIEA) recorded a strong annual growth of 33.1 percent in May 2021, relative to the contraction of 10.2
percent recorded in the corresponding period of 2020.
The sharp increase broadly reflects some base-drift effects as well as improvement in industrial production activities, domestic consumption, pick up in import activities, steady rise in construction activities and a rise in air-passenger arrivals, during the period.
The Ghana Purchasing Managers Index1, which gauges the rate of inventory accumulation by managers of private sector firms and measures dynamics in economic activity, pointed to some sustained levels of business activity in June 2021.
The Ghana Purchasers Managers’ Index (PMI) is computed by IHS Markit in collaboration with Stanbic Bank Ghana. The PMI is a composite index based on five sub-components, namely, New Orders, Output, Employment, Suppliers’ Delivery Times, and Stock of Items Purchased, and the data is obtained from survey questionnaires administered to about 400 private sector companies across agriculture, construction, industry, services and
wholesale & retail sectors.
The latest confidence surveys by the Bank of Ghana reflected mixed sentiments. Consumer sentiments softened on the back of a variety of factors including the implementation of the recently announced revenue measures contained in the 2021 Budget, while business sentiments remained somewhat broadly unchanged due to expectations of improvement in company growth prospects.
The latest trends in monetary aggregates showed a slightly higher pace of growth in total liquidity. Broad money supply (M2+) recorded a 21.3 percent annual growth in June 2021 mainly driven by Net Domestic Assets (NDA) of the banking sector.
This compared with 20.3 percent growth in the same period of 2020. Reserve money, on
the other hand, increased significantly by 41.2 percent, relative to 16.6 percent recorded in the corresponding period of 2020.
The high growth in reserve money largely reflected a net build-up in foreign reserves, higher purchases of cocoa as well as the lingering impact of the Covid-related fiscal stimulus of the prior year.
Performance of the banking sector during the first half of 2021 reflected sustained growth in total assets, investments and deposits.
Total assets increased by 17.2 percent to GH¢162.9 billion, on account of strong growth of 28.8 percent in investments in government securities to GH¢75.7 billion.
Total deposits recorded a year-on-year growth of 22.5 percent to GH¢110.3 billion on the back of strong liquidity flows.