By Elorm Desewu
Economic activities in the country for the first five months of this year have improved considerably.
The Bank of Ghana’s high frequency real sector indicators all showed signs of recovery in economic activity, albeit at a slower pace.
The updated real Composite Index of Economic Activity (CIEA) contracted by 3.7 percent in May 2023, compared to a contraction of 5.4 percent in April 2023, and a growth rate of 1.7 percent in the corresponding period of last year.
The main indicators that weighed down the Index during the period were port activity, cement sales, credit to the private sector and imports. Domestic VAT collections, industrial consumption of electricity and exports, however, improved.
The results from the Bank’s latest confidence surveys conducted in June 2023 reflected mixed sentiments. While consumer confidence softened on account of an uptick in prices of goods and services, which also led to some concerns about future economic conditions, business sentiments, on the other hand, remained largely unchanged.
Businesses’ optimism about the impact of stable macroeconomic conditions on their operations was offset by concerns about the cost implications of recent tax and utility tariff increases.
Similarly, Ghana’s Purchasing Managers’ Index (PMI) dipped to 50.4 in June 2023 from 51.3 in the previous month. The index however remained above the 50.0 mark for the fifth successive month, signalling stable business conditions.
Monetary aggregates for June 2023 showed an increased pace of growth in broad money supply (M2+) on year-on-year basis. Annual growth in M2+ accelerated to 44.4 percent in June 2023 relative to 19.1 percent in June 2022. In terms of components, the growth of M2+ was reflected in both domestic and foreign currency deposits.
