Credit rating agency Fitch is backing Ghana’s economy to be the best performer in the sub-Saharan region amidst the severe disruption caused by the COVID-19 pandemic.
Fitch, in its latest macroeconomic forecast update issued in September, predicted that the country’s economy will grow at 1.3 percent this year, which will not only beat government’s 0.9 percent projection but make it the best in the region.
“Having experienced a mild contraction in the second quarter, the economy is likely to gather pace – as evidenced by recent high-frequency data for Q320 – resulting in GDP growth of 1.3 percent, making Ghana an outperformer in the SSA region,” the agency said.
Ghana’s economy shrank by 3.2 percent in the second quarter of this year, reflecting the effects of restrictions imposed to halt the spread of COVID-19. The heavily impacted sectors included tourism and hospitality as well as aspects of the consumer retail sector.
But with the easing of many of the restrictions imposed by the government to deal with the pandemic, the economy is seen making a quicker-than-anticipated recovery from the shock.
Fitch’s projection follows a similar forecast by Goldman Sachs, the investment bank, which last month projected a 2020 growth rate of 1.2 percent for Ghana following a stronger-than-anticipated performance from some key sectors of the economy.
Goldman Sachs’ projection was a revision to its initial forecast that said the Ghanaian economy would see a 1.3 percent contraction on the back of the damaging impact of the pandemic.
The hospitality sub-sector, as widely anticipated, saw the biggest slump in output in the second quarter, recording an almost 80 percent fall.
Fitch said it expects Ghana’s economic growth to expand to as much as 4.8 percent in 2021, buoyed by rising demand for the country’s commodity exports and supportive macroeconomic conditions, which will facilitate higher investment and private consumption.
The agency said it was confident that regardless of the outcome of the general election in December, there would not be a significant shift in policy direction by Ghana.