Economist with Databank, Courage Martey says Ghana has entered into a technical recession following a contraction of the economy for a second straight quarter in 2020.
Latest provisional figures released by the Ghana Statistical Service show that the Ghanaian economy has contracted for the second straight quarter, with the value of goods and services produced in the 3rd quarter of 2020 declining by 1.1 percent when compared to the value of goods and services produced in the same period in 2019.
The latest contraction according to the government statistician, Professor Samuel Kobina Annim was driven by negative growth in the industry and services sectors of the economy which both contracted by negative 5.1% and negative 1.1% respectively.
The Agriculture sector on the other hand recorded the highest growth of 8.3% in the 3rd quarter.ADVERTISEMENT
Courage Martey expressed his disappointment in the latest development in an interview with Citi Business news.
“Having contracted for the second consecutive quarter this year shows that technically we are in a recession. It tells you the depth of the scar that the COVID-19 pandemic has had on this economy. It is a bit disappointing because high-frequency data picked up from June indicated that economic activity was picking up steadily to the point where there was hope that we could be edged slightly into positive growth.”
Mr. Martey is however optimistic the economy will return to positive growth in the short-term if government sustains the implementation of key policy support programs for various sectors of the economy.
“If you look at the nature of the contraction in quarter three (-1.1 %), it is a slower contraction when compared to the one in quarter two (-3.2 %). It is a sign of improvement albeit quite slow. It leaves us with reason to be hopeful but also with a reason to continue policy support for the various sectors of the economy for us to emerge from this technical recession we find ourselves in.”