Slowdown of economy’s first quarter growth rate troubling – Economist

Director of Research at the Institute of Statistical, Social and Economic Research (ISSER), has raised concerns about the marginal slowdown of the economy’s first quarter growth rate.

This follows the latest figures released by the Ghana Statistical Service (GSS) placing Ghana’s economic growth at 4.9% in the first quarter of 2020, compared to a growth rate of 6% of Gross Domestic Product (GDP) during the same period in 2019.

But according to Professor Peter Quartey, although the slowdown is marginal, the current growth rate remains a source of concern, with substantial policies required to boost growth.

“Although it is marginal, it is still a source of concern because we need to be growing at the rate of 10% if we want to move people out of poverty, that is, the bottom 20%, they are the very poor. They are growing, and I must say that it is good, but we need to grow at a much faster rate,” Prof Quartey told Citi Business News.

He also emphasised the importance of an enabling environment created by government, to encourage investors to make holdings into key sectors post the coronavirus pandemic.

“We are not going to live with COVID-19 forever. We will definitely come out of it. Just like we did for Ebola and any other outbreak. So, 8 to 10% growth should be our medium to long-term plan, but then something can be done so that we can accelerate the growth process. That is why we are asking government to give some bail out measures like the initiative from Bank of Ghana, where interest rates have been reduced by two percentage points, where agriculture and other sectors are being stimulated, businesses are given bailouts and loans at a much-reduced rate,” he explained.

“These are all means by which we can accelerate the process. I believe we should be doing more of this so that we don’t record lower growth rates for a long period, but rather we can turn things around and grow at a much faster rate,” he concluded.

Per the figures by the GSS, the services sector recorded the highest growth rate of 9.5% followed by the Agriculture sector which expanded by 2.8% and the Industry sector by 1.5%.

The main sub-sectors driving GDP growth in January to March 2020 GDP were Information & Communication, Manufacturing, Education and Public Administration & Defence, Social Security.