Ghana’s economic indicators slow during the first quarter in 2020 with a “rising of risks and vulnerabilities”, battered by the covid19 pandemic according to Standard & Poor’s bond rating agency.
Country’s Central Bank keeps its base interest rate at 14.5% in May while ghanians’ consumers are impacted with a growing inflation, due to the coronavirus pandemic lockdown.
It is the first time country’s economy expands at its slowest pace in 37 years said observers.
Ghana’s GDP growth for 2020 is projected at 2% to 2.5%, which is well below an earlier forecast of 5% to 6% before the coronavirus pandemic lockdown. As consequences, Standard & Poor’s revises country’s sovereign credit rating outlook to negative from stable and affirms the debt grade at B on the 30th April.
Moody’s Investors Service revises country’s sovereign debt rating to negative from positive and affirms the debt grade at B3 during the meantime. Moody’s cited as trigger behind the rising risks “an ultimate emanating from the coronavirus outbreak, to Ghana’s funding and debt service, with financing beyond immediate official creditor emergency support looking increasingly vulnerable”.
According to the Trading Economics publications “The economy of Ghana advanced 5.6 per cent year-on-year in the third quarter of 2019, little-changed from a 5.7 per cent growth in the previous period. It was the slowest expansion since the second quarter of 2018”.
Bank of Ghana’s base interest rate is left at 14.5%
In April 2020, Ghanaians’ consumers were heavily impacted for the first time in 2 years (since February 2018) by an unprecedented meantime inflation mostly in areas where the government ordered lockdown to stem the coronavirus outbreak as some products were increased up to 37% their price.
It derived from the country headline inflation has crossed the target band of 6 to 10% of its rate. From 7.8% per cent in the previous month, country’s inflation climbed at 10.6% in April 2020. Consequently Bank of Ghana left its benchmark interest rate steady at 14.5% during its May 2020 meeting, bringing borrowing costs to the lowest level since May 2012.