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The Economy of Ghana in Perspectives

Globally, growth in 2018 was generally stagnant across the world and West Africa sub-region is no exception. According to the World Bank, growth in Africa has been projected to average 5% for 2019. Global economic activity picked up in the fourth quarter of 2018 and the momentum continued through to 2019. The widespread recovery across many advanced economies is on the back of cyclical recovery in global manufacturing and trade, stronger global momentum in demand, particularly investment, and increased business and consumer confidence. These developments have direct implications for the domestic economy via trade and credit channels.

With strong fiscal policies and tightening of monetary policy (reducing policy rate to 16%) the Ghanaian economy in 2017 started to show positive macroeconomic indicators pointing to strong fundamental even though foreign exchange fluctuations remained volatile and inflationary pressure were real. GDP growth slowed from 2.9% in 2014 to 2.2% in 2015 but improved slightly to 3.4% in 2016 (including oil). This trend in growth increased significantly to 8.1% in 2017 due to the production of TEN oil fields and slowed slightly to 5.6% in 2018 indicating strong improvements. Inflation over the years has trended downwards from 15% in 2016 to 9.4% in July 2019. The Ghana cedi continue to be volatile against all the major trading currencies. The trends however, shows that, the cedi depreciated by 26.1% in 2015 to 3.3% in 2016 and further down to 2.4% as at end of 2018 indicating moderate depreciation.

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