The announcement of the expansion of Ghana’s economy does not seem to come as a surprise to some stakeholders in the finance space.
Economist, Prof. Lord Mensah, is not impressed with the growth, asserting that the growth of the economy at the macro level does not reflect in the pockets of Ghanaians.
The Ghana Statistical Service announced on Tuesday that Ghana’s Gross Domestic Product (GDP) growth rate increased to 4.8 percent in the second quarter of 2022.
This new figure exceeds the revised 2022 GDP growth rate of 3.7 percent.
Prof. Lord Mensah reacting to the development in interaction with Citi Business News said, “The growth at the macro level does not mean that things are picking up at the ordinary level. Government may be spending at the macro level, but it doesn’t reflect in our pockets.”
“If you measure the GDP using the expenditure approach, we still would have improved compared to last year. Before COVID, we were growing around 7%, and we didn’t see that in our pockets. So it’s not a growth that is surprising at all because once government is active on the grounds, and you capture GDP growth using the expenditure approach, you’ll see a narrow growth. Last year, we had just come out of COVID so definitely, this year was going to be better.”
Meanwhile, Prof. Mensah says it is likely that Ghana will achieve the 3.7 percent GDP growth rate target set for the year 2022.
He explained, “At the beginning of the year, we were not doing up to 4%. Obviously, when we strike the average to the end of the year, we should anticipate that we’ll keep to 3.7%. So projections seem to be falling in order.”
“But from now till the end of the year, we’re not going to see much change because we’ll be reading the budget very soon. So whatever the government, businesses and individuals are spending now, I don’t think there’ll be much change. And also looking at inflation and the cedi depreciation, investors will be more conserved in their spending rather than going all out.”
