The Economist Intelligence Unit predicts that Ghana’s GDP growth rate will drastically slow to 1.3% in 2023, due to rising prices and monetary tightening leading to a contraction in domestic demand.
This is lower than the projections of the World Bank and the International Monetary Fund.
The slowdown will result in reduced consumption and sustained cedi depreciation, which will boost net exports, the sole growth driver in 2023.
The EIU expects growth to remain subdued in 2024 as tightening continues, but then pick up over 2025-27 driven by an uptick in gold and oil export earnings.
The EIU also warns that macroeconomic instability and a public debt crisis will weigh on Ghana’s business environment and its ambitions to become a West African trading hub.
The Ghanaian government is expected to remain committed to fiscal consolidation in 2023-27, with revenue-raising measures in place to shrink the fiscal deficit.
However, the EIU predicts that a slowing economy will keep the revenue/GDP ratio below potential in 2023, despite the revenue mobilization measures in the 2023 budget.