Ghana’s private sector shows positive signals beginning Q2 – S&P

The private sector in West African country, Ghana, showed positive signals at the commencement of quarter two, the global rating agency S&P reported Thursday.

According to the rating agency, data for the opening month of the second quarter signaled a sustained improvement in Ghana’s private sector.

Customer demand is reported to have improved, with easing inflationary pressures helping to stimulate new orders, which subsequently fed through to higher business activity.

Firms, in order to meet increased orders, expanded their employment and purchasing activities.

“Ghana’s private sector showed more positive signals at the start of the second quarter as the economy remained in recovery mode.” “A sustained softening of inflation has provided scope for firms to secure greater new order volumes and the confidence to commit to raising employment and purchasing activity,” said Andrew Harker, Economics Director at S&P Global Market Intelligence.

He predicted the Ghanaian economy would witness a sustained recovery if inflation kept falling.

“Should inflation continue to trend downward, we will likely see the recovery sustained in the months to come,” Harker added.

The S&P Global Ghana Purchasing Managers’ Index (PMI) posted 51.3 in April, up from 50.9 in March and above the 50.0 no-change mark for the third month running.

The latest figures, the global rating agency observed, “signalled a modest improvement in the health of the country’s private sector, and one that was the largest since Dec. 2021.”

Ghana’s economy has in recent times been going through difficulties, with inflation hovering at 45 percent in March, down from 52.8 percent in the prior month after reaching a more than two-decade high of 54.1 percent in December last year.

The opposition and businesses have blamed the government for the high inflation, the high cost of doing business, and the fluctuating local currency, the cedi, against their trading partners.

The government is seeking a 3 billion U.S. bailout from the IMF to turn around the economy.

Ghana achieved a Staff Level Agreement with the IMF in Dec. 2022 in record time, six months after beginning the negotiations in July of the same year. Enditem