Ghana's Economy 75% Bigger than Previously Estimated
09 November 2010
The West African nation's gross domestic product this year is 44.8 billion cedis ($31.2 billion), compared with the previous estimate of 25.6 billion cedis, Grace Bediako, head of the Accra-based agency said.
"The revisions will be a huge positive for the relative risk matrix " of Ghana, Stephen Bailey-Smith, an analyst at Standard Bank Plc in London, said in a note to clients. The changes "should foster a rating upgrade."
The yield on Ghana's 91-day Treasury bills is about 12.4%, compared with inflation of 9.4%, after the government posted budget deficits equivalent to 14.5% of GDP in 2008 and 9.7% in 2009. The IMF said in October that the shortfall may exceed the 8% target this year. Those figures are now significantly smaller.
The statistics service also raised its growth forecast for this year to 6.6% from 5.9% and revised up its calculations for the previous three years. GDP expanded 4.7% in 2009, 8.4% in 2008 and 6.5% in 2007, compared with previous estimates of 4.1%, 7.2% and 5.7%.
Economic growth slowed in 2009 after the government embarked on an austerity program to bring down the budget deficit.
The size of the economy was revised up after new economic activities were added, the methodology was improved and the base year was shifted to 2006 from 1993, Bediako said. "The new data series includes activities of the oil sector, forest plantations and information and communication, which were not included in previous estimates," she said.
The new GDP places Ghana among middle income countries, as defined as those with a per capita income of more than $976 a year, Bediako said. Ghana's is now $1,318.36.
Ghana's economic growth may average about 8% in the next three to five years, as oil production starts from the West African nation's Jubilee oil field December, according to Kofi Wampah, deputy central bank governor. He said the economy may expand 10-15% next year, slower than the Finance Ministry's prediction of 20%. Bloomberg
