GhanaInsightsMacroeconomic update

19 June 2024

Ghana’s 1Q2024 real GDP growth: Green shoots of recovery

In brief

  • Ghana’s real sector showed green shoots of emerging recovery from the 2023 trough with a stronger overall growth momentum in 1Q2024 consistent with our FY2024 growth outlook. Overall real GDP expanded by 4.7% year-on-year in 1Q2024, outpacing the 3.1% outturn in the same period of 2023 and representing the highest quarterly growth since 2Q2022.
  • The overall growth recovery was powered by a rebound within the industrial sector, which expanded by 6.8% y/y as improved activity in key sub-sectors benefited from favourable base effect. However, a moderation in growth in the agriculture (4.1% y/y) and services sectors (3.3%) indicates the lingering fragility within the real sector which was emphasized by the slower growth rate in non-oil real GDP at 4.2% y/y in 1Q2024.
  • The moderation in services sector growth reflects contractions in fiscal-dependent sectors as the IMF-induced fiscal restraint triggered a normalisation in public sector activity following the increased recruitment and higher remunerations in 1Q2023 prior to the IMF programme.
  • Agriculture endured a broad-based weakening in key sub-sectors with cocoa being the worst performer as issues of climate change, illegal mining, and diseases undermined productivity. With expectations for cocoa output to undershoot the authorities’ target for 2023/24 season, we foresee lingering downside risk to agriculture growth in 2024, although improved food crop production in 3Q2024 will partly mitigate the downside.
  • Extractives take the shine in industrial sector rebound but manufacturing and construction pulse are also improving. We believe the strong growth in the oil & gas sector reflects the start of production from Ghana’s Jubilee South East (JSE) oil & gas project in 2H2023, which supported the current year’s production levels relative to 1Q2023. With five new wells scheduled to come onstream in 2024, we believe the prospect remains positive for growth momentum in extractives and overall industry in 2024. Consequently, we reiterate our FY2024 forecast range for overall real GDP growth between 2.9% – 3.9% (midpoint: 3.4%).

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