Ghana Economic Outlook
Recent macroeconomic and economic developments
GDP increase is envisioned at 5.0% in 2021, up from 0.four% in 2020, supported via way of means of extended family intake and commodity exports at the call for aspect and a rebound in offerings at the deliver aspect. Inflation slowed from 9.9% in 2020 to 10.0% in 2021 given low meals inflation, which became 47.7% of overall inflation. The financial deficit is predicted to slim from 15.2% of GDP in 2020 to 12.1% in 2021 because of extended sales collection. The united states of america stays at excessive hazard of debt misery with a debt-to-GDP ratio of 77.5% in September 2021, in opposition to 76.1% in December 2020.
The modern account deficit is envisioned to have narrowed to 2.1% of GDP in 2021 from three.1% of GDP in 2020, given the products exchange surplus. Foreign trade reserves extended from $8.6 billion in December 2020 to $9.7 billion in December 2021 (four months of imports). The Ghana cedi depreciated in addition in opposition to the greenback in 2021, via way of means of four.1�ter three.9% in 2020, each years because of forex call for–deliver mismatches. The banking zone remained sturdy in 2021 with a capital-adequacy ratio of 20.8% at endJune 2021, almost double the regulatory minimal of 11.5%. Poverty declined from 12% in 2020 to 11% in 2021, given GDP in line with capita increase of 2.three%, from a contraction of 1.7% in 2020. However, unemployment extended via way of means of 2.three percent factors to thirteen.four% in 2015– 21. The united states of america has devoted the SDR allocation of $1 billion to finance the 2022 price range deficit.
Outlook and risks
The outlook stays positive, with projected GDP increase of 5.three% and 5.1% in 2022 and 2023 supported via way of means of the Ghana COVID-19 Alleviation and Revitalization of Enterprises Support Program. Potential inflationary strain exists because of extended electricity and meals charges related to the effect of the Russia– Ukraine. Inflation is projected to surge to 15% in 2022 earlier than falling to 9.1% in 2023. The Bank of Ghana is predicted to undertake a good financial coverage stance. The financial deficit is projected to slim in addition to 12.8% of GDP in 2022 and to 10.three% in 2023, spurred via way of means of sales-improving reforms. The modern account deficit is projected to slim to 1.6% of GDP in 2022 and three.three% in 2023, on extended exports.
Climate exalternate troubles and coverage options
Climate exalternate—stemming from erratic rainfall, growing temperatures, drought, floods, a growing sea level, and tidal waves—gives giant threats to agriculture and electricity, in addition to weather-prompted migration. Agriculture and electricity (given its big dependence on hydropower) each rely closely on rainfall and are therefore quite at risk of fluctuating rainfall. Droughtlike situations withinside the Northern Savannah Ecological Zone have brought about migration to the south. Ghana is forty two at the 2021 GCRI. At COP26, Ghana released its up to date NDC. It is a member of the Vulnerable Twenty Group of Ministers of Finance devoted to assisting carbon pricing and the Coalition of Finance Ministers for Climate Action to facilitate engagement in accelerating resilience to weather exalternate. The authorities requires $9.three billion to finance updating the NDCs in 2021–30. Recognizing constrained financial space, the authorities is exploring greater results-primarily based totally weather financing options, which include carbon markets, weather effect bonds and leveraged non-public participation. Ghana is making development in attaining SDG thirteen on weather motion via way of means of 2030.
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