Ghana’s economy is moving tentatively in the right direction, Andrew Harker, Economics Director at S&P Global Market Intelligence said on Monday.
According to him, the latest survey conducted by the global rating agency on Ghana indicates that the recovery of the country’s private sector continued through to the second quarter into the year which he says is a catalyst for economic recovery.
“Latest PMI data signaled that the recovery in Ghana’s private sector continued midway through the second quarter. The price indices from the survey are consistent with a sustained slowdown in inflation, which is providing the catalyst for the recovery and helping firms secure greater volumes of new business,” said Andrew Harker, Economics Director at S&P Global Market Intelligence.
“While there is still some way to go before business conditions become more comfortable, the picture in May was one of an economy moving tentatively in the right direction,” added Harker.
According to the S&P Global Ghana report released here Monday, a further softening of inflationary pressures helped to support demand across Ghana’s private sector during May.
The global standard rating agency said stronger expansions in output in the West African country, new orders, and purchasing activity were signaled, and the business outlook brightened.
A key theme across the PMI survey in May was the positive impact of softening price pressures on customer demand and wider activity in the private sector.
The S&P Global Purchasing Manager’s Index was unchanged at 51.3 in May, thereby signaling an improvement in business conditions for the fourth successive month in the country.
Although companies continued to increase their selling prices midway through the second quarter, the rate of inflation eased for the sixth month running from last November’s series record and was the softest in just over two years.
The global rating agency further indicated that the weaker rise in selling prices was in line with the picture seen for input costs, with purchase prices and staff costs increasing at the softest rates in 30 and four months, respectively.
Ghana’s annual inflation rate fell for the fourth month to 41.2 percent in April, down from 45 percent in the prior month and a more than two-decade high of 54.1 percent in December.
The IMF Executive Board last month approved a SDR 2.242 billion (about 3 billion U.S. dollars) 36-month Extended Credit Facility (ECF) arrangement for Ghana. This decision will enable an immediate disbursement equivalent to SDR 451.4 million (about 600 million U.S. dollars).
The authorities’ economic program, supported by the ECF arrangement, builds on the government’s Post-COVID-19 Program for Economic Growth (PC-PEG), which aims to restore macroeconomic stability and debt sustainability and includes wide-ranging reforms to build resilience and lay the foundation for stronger and more inclusive growth.
Ghanaian President Nana Addo Dankwa Akufo-Addo said recently that the IMF’s support was to help restore economic growth in the country. Enditem