Is the GH¢1 trillion GDP projection for 2024 achievable?

This article seeks to provide answers to the question of whether the GH¢1 trillion GDP projection by the government of Ghana for 2024 is achievable. And if it is achievable, how difficult or easy is it going to be? Again, if it is achievable, which conditions are likely to enhance or impede its achievement?

My analyses show that with the projected growth rate of 2.8% and an inflation target of 15% for 2024, the expected nominal GDP achievable in 2024 is GH¢ 1,004.26 billion, which is a little over GH¢1 trillion. The analyses show that with growth of 2.8%, the only way the GH¢1 trillion mark may not be crossed is if inflation drops below 15% (which is most unlikely). With the expected 2.8% growth, if inflation should drop to 14% in 2024, nominal GDP would be GH¢995.50 billion (which is below GH¢1 trillion).

However, if we are to achieve GH¢1 trillion nominal GDP at 14% inflation, then the economy must grow by 3.3% in 2024. In effect, as long as inflation is 15% or higher, and expected growth is 2.8%, the GH¢1 trillion mark is not just achievable, it is obvious.

The analyses also show that if inflation should remain as high as 30% (like we currently have in 2023), the GH¢1 trillion mark will still be crossed with even zero or negative economic growth. In fact, at an inflation rate of 30%, negative 9% economic growth will yield a nominal GDP of GH¢ 1,004.92 billion (which is more than GH¢1 trillion). This means that provided inflation remains high, even if we are not able to attain 2.8% economic growth, the GH¢1 trillion GDP mark can be crossed.

So, what would happen if growth falls below 2.8% (say 2.0%)? At 2.0% growth, GH¢1 trillion nominal GDP will still be achieved as long as inflation does not fall below 15.5%. What if the economy grows at 1.5%? Well, we can still cross the GH¢1 trillion mark if inflation does not fall below 16%. What about growth of 1%? With that, we can cross the GH¢1 trillion mark if inflation is not below 16.6%. Furthermore, if growth is only 0.5%, we can still cross the GH¢1
trillion mark if inflation is not below 17.2%.

In fact, with no growth at all (that is, zero growth rate) in 2024, we can cross the GH¢1 trillion mark if inflation is not below 17.8%. Finally, with a growth of negative 5%, we can cross the GH¢1 trillion mark if inflation is not below 24%.

Therefore, achieving GH¢1 trillion nominal GDP in 2024 per se is not a difficult task, but achieving it at a low inflation rate (such as below 15%) would make it tremendous.