Ghana Economic Overview
GHANA ECONOMIC OVERVIEW In the first quarter of 2010, the Ghanaian economy continued to show increasing stability. The drop in inflation rate deepened as headline inflation recorded a ninth consecutive decline in March. Supported by strong inflows from exports, increased international reserves, the foreign exchange market remained stable and the cedi strengthened against the major trading currencies. At the end of the first quarter, the country’s gross international reserves stood at US$3.3 billion, enough to cover three months of imports of goods and services.
The Real Sector has seen some developments with a pick up in consumer spending, auto sales and job advertisements although indirect measures of income suggested some softening. The continued downward trend in inflation (15.97% at the end of 2009 to 13.32% at the end of the first quarter of 2010) was broad-based driven by both food and non-food indices. Food inflation fell sharply from 11.8% in December 2009 to 7.35% in March 2010, while non-food inflation declined at a slower pace from 18.8% to 17.8%.
Total government expenditures in the first quarter of 2010 amounted to GHc2.4bn (US$1.69bn) representing 9.3% of GDP. This was 6% above the target and 48% more than the outturn for the corresponding period of 2009. Total revenue and grants realized during the first quarter of 2010 amounted to GHc1.83bn (US$1.29), 16.5% higher than the receipts for the corresponding period in 2009 but was 2.8% below the budgeted target for the first quarter of 2010. Total credit of the banking system declined from 16% at the end of the fourth quarter of 2009 to 2.7% at the end of the first quarter of 2010. In real terms, bank’s outstanding credit to public and private institutions went down to -9.3% at the end of the first quarter of 2010 compared to a growth of 22.8% a year ago.
The Monetary Policy Committee (MPC) of the Bank of Ghana reduced the Policy Rate from 18% to 16% in February 2010. Interest rates
The Real Sector has seen some developments with a pick up in consumer spending, auto sales and job advertisements although indirect measures of income suggested some softening. The continued downward trend in inflation (15.97% at the end of 2009 to 13.32% at the end of the first quarter of 2010) was broad-based driven by both food and non-food indices. Food inflation fell sharply from 11.8% in December 2009 to 7.35% in March 2010, while non-food inflation declined at a slower pace from 18.8% to 17.8%.
Total government expenditures in the first quarter of 2010 amounted to GHc2.4bn (US$1.69bn) representing 9.3% of GDP. This was 6% above the target and 48% more than the outturn for the corresponding period of 2009. Total revenue and grants realized during the first quarter of 2010 amounted to GHc1.83bn (US$1.29), 16.5% higher than the receipts for the corresponding period in 2009 but was 2.8% below the budgeted target for the first quarter of 2010. Total credit of the banking system declined from 16% at the end of the fourth quarter of 2009 to 2.7% at the end of the first quarter of 2010. In real terms, bank’s outstanding credit to public and private institutions went down to -9.3% at the end of the first quarter of 2010 compared to a growth of 22.8% a year ago.
The Monetary Policy Committee (MPC) of the Bank of Ghana reduced the Policy Rate from 18% to 16% in February 2010. Interest rates