- Ghana's economy is likely to contract by 1% in 2020, according to the Economist Intelligence Unit
- The report contradicts earlier projections by the government and Fitch, a rating agency
- Reasons for the decline include falling oil prices, operational difficulties in some oilfields as well as the impact of the coronavirus
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The Economist Intelligence Unit (EIU) has revealed that Ghana’s economy is likely to contract by 1% in 2020.
YEN.com.gh understands that this contradicts the 1.5% Gross Domestic Product (GDP) growth rate announced by the government and confirmed by the International Monetary Fund (IMF) and the World Bank.
It is also in contradiction with the 2% growth rate predicted by Fitch, an international rating agency.
READ ALSO: Ghana's economy grew by 6.5% in 2019
A classfmonline report shows that the EIU believes Ghana’s economy will contract because of falling oil prices.
It has also been linked to operational difficulties in some oilfields as well as the impact of the coronavirus.
It is, however, expected that real GDP growth will rebound to an average of 5.7% a year from 2021 to 2024.
This is premised on the belief that the coronavirus would eventually vanish and oil prices and output would experience recoveries.
The Minister of Finance, Ken Ofori-Atta, at the end of March 2020, revealed that the government was in the process of reducing its forecast for economic growth in 2020 from 6.5%to 1.5%.
He also predicted an even lower outcome if Ghana was forced into a full lockdown due to COVID-19.
Meanwhile, Moody’s, an international rating agency, has downgraded Ghana’s economic outlook from positive to negative.
The firm, however, maintained the country’s long-term local and foreign currency issuer and foreign currency senior unsecured bond ratings at B3.
Information available shows that the outbreak of the coronavirus is a key reason for the downgrade.
READ ALSO: Latest GSS report shows inflation remains unchanged at 7.8%
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