Economic growth slows further in 3rd qtr

Ghana’s economic growth has slowed down in the third quarter of 2019 to 5.6 percent, its slowest growth since the 5.4 percent recorded during the second quarter of 2018.

This depicts a steady decline in the country’s economic growth for a fourth consecutive quarter and puts the achievement of government’s 7.0 percent Gross Domestic Product growth target for 2019 in jeopardy. While government recognized the ongoing slowdown in economic growth early enough to revise it downwards in November from an original target of 7.6 percent, it appears even this may be proving overly optimistic.

Data released by the Ghana Statistical Service reveals that the provisional real quarterly gross domestic product growth including oil and gas, is 5.6 percent (year on year) in the third quarter of 2019, down from 7.4 percent growth for the same period in 2018. Since then however, the growth has continuously slowed, by the quarter.

At the release of this data, the Government Statistician, Samuel Kobina Annim, said the main sub-sectors driving the growth in the third quarter of 2019 were information and communication, real estate, education, mining and quarrying and crops.

The GDP estimate at constant 2013 prices for the third quarter of 2019 was GHc 41,512.7 million compared to GHc 39,299.4 million for the same period of 2018.

The Agriculture sector recorded the highest growth of 5.9 percent while the Industry and Services sectors respectively both expanded by 5.7 percent.

The non-oil GDP growth rate for third quarter 2019 was 4.6 percent which was much slower than the same period in 2018 which recorded a growth rate of 8.5 percent.

Prof. Annim attributed the slow down of the non-oil GDP growth rate to the mining and quarrying sub-sector when oil and gas activities are excluded. The mining and quarrying sub-sector excluding oil and gas activities contracted by 7.0 percent in the third quarter 2019 compared with an expansion of 45 percent in same period of 2018.

“From our perspective, one of the things we want to put emphasis on is that consistently there has been a continuous drop in both the production and value addition of gold. Indeed, for the 3rd quarter of 2019, we recorded a drop of 19 percent, and for the second quarter of 2019, we recorded a drop of 11 percent, which further dropped from the first quarter,” he said.

Prof. Annim further attributed the slow growth rate to the declining performance of manganese.

“In the case of manganese, from a quarter on quarter basis, there was a jump between the first and second quarters of 2019, to over 1000 percent increase. But this 1000 percent increase that was recorded for manganese for the second quarter of 2019 dropped to about 2 percentage points in the third quarter of 2019,” he stated.

The non-oil GDP at constant 2013 prices for the third quarter of 2019 was GHc 37,952.6 million compared to GHc 36,272.7 million in the same period of 2018.

Industry Sector

The Industry sector’s performance was due to the high growth rate in electricity sub sector, of 10.8 percent, mining and quarrying 8.5 percent and manufacturing 4.6 percent. However, contractions in water and storage, waste management and remediation activities of 1.3 percent and slower expansion in the construction sub sector, at 1.4 percent, negatively affected the industry sector’s performance.

Services Sector

The growth rate of 5.7 percent in the services was due to high growth rates in information and communication 26.4 percent, real estate 22.1 percent, education 9.5 percent, public administration, defence and social security 6.1 percent and transport and storage 5.1 percent sub-sectors.

This year’s economic growth is proving disappointing. Following 6.8 percent growth in 2018, the International Monetary Fund forecast 8.0 percent for 2019 which was even higher than government’s own target.

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