Databank’s economic outlook for Ghana

Ghana’s headline inflation has risen to 11.3% in May, exceeding the country's inflation target band of 8.0% plus or minus 2. This increase comes as no surprise to economists like Courage Kingsley Martey, a Senior Economist at Databank Group. The panic buying and stockpiling of essential items before the three-week lockdown in April caused a shock to the supply side, leading to the current inflationary pressures. Despite the temporary surge in inflation, Martey remains optimistic about Ghana's ability to return to single-digit inflation once supply chains normalize. The World Bank projected a slowdown in Ghana's economic growth to 1.5% this year due to disruptions in supply chains and a collapse in export demand for agricultural commodities. This forecast aligns with the challenges faced by Ghana and other agric commodity exporters. However, Ghana is already strategizing for a bounce back, with fiscal authorities focusing on saving both lives and livelihoods. Measures such as social intervention programs and enterprise revitalization initiatives are being developed to support businesses and ensure a quick recovery. Martey emphasized that the current inflationary pressures are driven by temporary supply-side shocks rather than underlying monetary issues. As Ghana works towards restoring normalcy in supply chains and imports, the economy is expected to stabilize, leading to a gradual decline in inflation rates. The government's proactive approach in implementing fiscal policies to support businesses and stimulate economic growth indicates a commitment to navigating through the current challenges and achieving a sustainable recovery. Looking ahead, Ghana anticipates announcing additional programs for enterprises to facilitate growth and resilience in the face of the ongoing crisis. By leveraging fiscal measures and targeted interventions, Ghana aims to mitigate the impact of COVID-19 on its economy and set the stage for a robust recovery in the coming year.