This is far lower than the projections by the International Monetary Fund (5.2 per cent) and the World Bank (5.0 per cent).

The research arm of ratings agency, Fitch, is attributing this to the rising inflation rate, currency weakness, and the Russian-Ukraine war, among other factors which it believes will erode the purchasing of consumers and affect the profit margins of businesses.

Giving an update on Sub Saharan Africa economies for the first half of this year, Country Risk Analyst at Fitch Solutions, Mike Kruninger, said it expects the Ghanaian economy to expand to 4.9 per cent in 2023.

“Overall, we forecast the Ghanaian economy to post real growth of 2.6 per cent in 2022 after which it will accelerate to 4.9 per cent in 2023. Whereas the slow growth rate, especially for 2022, is in a decade, we believe that the economy will face pretty significant challenges in the short term.”

“So the first challenge and one of the most significant ones is rapidly rising inflation. The consumer price growth reached 26.6 per cent in May [2022], which is the highest inflation rate in over 18 years. Really, it is biting into the purchasing power of the households and eroding corporate profit margins,”he explained.

Mr Kruninger also expressed worry about the declining consumer confidence.

“So if we look at the consumer confidence which is published by the Bank of Ghana, we see that sentiments are indeed really down. The April 2022 index is even lower than the value in April 2020 in the height of the COVID-19 pandemic. And as a result, we expect that consumer spending will be subdued over the coming months.”

“Another important challenge the Ghanaian economy is facing is weak fiscal condition. The county’s position has deteriorated pretty significantly over the past two years, mostly due to the COVID-19 pandemic. The government had to borrow from international capital markets. This is not the case now, but the debt has gone up to unsustainable levels,” Mr Kruninger said.