Mr Ken Ofori-Atta, the Minister of Finance, has stated that Ghana’s economy continues to remain robust in spite of observed headwinds, particularly, with domestic revenue mobilisation and volatilities in the domestic currency market.
He however, stated that Provisional first quarter Gross Domestic Product (GDP) estimates released by the Ghana Statistical Service (GSS) in June 2018 indicated that real GDP grew by 6.8 percent for the first quarter of 2018, compared to 6.7 percent recorded for the first quarter of 2017.
He said the Industry Sector also recorded the highest growth rate of 9.6 percent, compared to 11.8 percent in the same period in 2017, followed by the Services Sector with a growth of 5.2 per cent, higher than the 3.3 percent recorded in the same period in 2017, whilst the Agriculture Sector grew at 2.8 percent, compared to the 8.4 percent recorded in same period in 2017.
Mr Ofori-Atta said these in his presentation of the Mid-Year Fiscal Policy Review of the 2018 Budget Statement and Economic Policy to Parliament in Accra on Thursday.
Giving update on the macroeconomic developments in 2018, he said in the domestic economy, monetary policy was supportive of economic activity during the first five months of 2018 due to relative stability in the macroeconomic environment.
The Monetary Policy Rate, he said was also cumulatively reduced by 300 basis points (bps) from 20 percent in January 2018 to 17 percent in May 2018, while the interest rate on the money market for the first five months of 2018 generally trended downwards on year-on-year basis.
The Finance Minister stated that in the review period, the average interest rates on the 91-day T-Bill declined from 13.69 percent in May 2017 to 13.35 percent in May 2018, whilst the 182-day T-Bill declined from 15.35 percent in May 2017 to 13.85 percent in May 2018.
He further explained that the spread between the borrowing and lending rates widened by 26 bps year-on-year from 14.79 percent in May 2017 to 15.05 percent in May 2018, while the average base rate of banks declined by 389 bps, year-on-year, from 26.25 percent recorded in May 2017 to 22.36 percent in May 2018.
Again, he said, the disinflationary trend experienced in 2017, continued during the first five months of the year, largely supported by stability in the foreign exchange market and generally favourable macroeconomic developments.
He said the Bank’s latest forecast suggests that inflation, will remain within the medium-term target of 8±2 percent in the last three quarters of 2018, barring unanticipated shocks.
On the Forex Market, the Ghana cedi weakened by 0.8 percent and 1.3 percent against the US dollar and the Pound Sterling, respectively, but strengthened by 0.5 percent against the Euro, he said.
Mr noted that the provisional trade balance for the period January to May 2018 recorded a surplus of US$1,354.89 million, 6.59 percent higher than the surplus of US$1,271.09 million recorded during the same period in 2017.
He explained that the improvement in the trade balance was as a result of higher export earnings, driven by oil and non-traditional exports which outweighed the value of imports.