Government projects GDP growth to drop to 1.5% with partial lockdown

Government has projected the real GDP growth for 2020 to reduce from an earlier projection of 6.8% to 1.5% for this year.

Speaking in Parliament on Monday, March 30, 2020, Finance Minister Ken Ofori-Atta said, “Mr Speaker, we are experiencing a slowdown in economic activities in the various sectors of the economy, as a result of the coronavirus pandemic. This will altogether slow down economic growth, considerably.”

He added, “Even though events on the coronavirus pandemic are still unfolding, a preliminary analysis of the impact of the Coronavirus menace on the real sector shows that the 2020 projected real GDP growth rate could decline from 6.8% to 2.6% with an outbreak and 1.5% with a partial lock-down. Mr Speaker, the projected growth will further worsen in the event of full lock-down.”

The 1.5% projection by the government is worse than what the Bank of Ghana (BoG) projected earlier this month.

This cut in the country’s economic growth forecast for 2020 is the lowest in 37 years due to the collapse in oil prices and the impact of the coronavirus, according to Bloomberg.

According to the Bank of Ghana, it fears the Coronavirus pandemic (COVID-19) will collapse growth in the economy to 2.5 per cent in 2020.

The BoG said the 2.5 per cent growth rate would be a “worst-case scenario” impact from the challenges of the disease on the local economy.