By Elorm Desewu
The latest Bank of Ghana survey indicates that economic activity has slowed for the month of July 2022. The Composite Index of Economic Activity (CIEA) recorded an annual growth of 0.5 percent in July 2022, compared to 1.6 percent in June 2022, and 5.0 percent in December 2021.
The sources of the slowdown were from construction and port activities.
Additionally, the latest credit conditions survey conducted in August 2022 indicated an overall net tightening of credit stance to corporates and households by the commercial banks. This was reflected in the steady increase in average lending rates.
This notwithstanding, new advances increased by 56.1 percent year-on-year to GH¢33.8 billion in August 2022, relative to a 4.9 percent increase in August 2021. Annual growth in private sector credit was 35.8 percent in August 2022, compared with 9.6 percent a year ago.
In real terms, private sector credit increased, albeit marginally, to 1.4 percent due to sustained price pressures. This compares with a contraction of 0.2 percent over the same period in 2021.
Results from the Bank’s August 2022 confidence surveys showed further softening of Business and Consumer sentiments. While consumer confidence dipped on account of rising inflation, business sentiments softened on the back of concerns about price pressures, currency depreciation, and weakening consumer demand. The survey findings were broadly in line with an observed downturn in Ghana’s Purchasing Managers’ Index (PMI) in August 2022.
Reserve money, for the period under review, increased at a slower pace relative to a year ago. Annual growth in reserve money was 33.1 percent in August 2022, compared with 36.1 percent in August 2021.
The broad money supply (M2+) increased marginally due to a sharp fall in Net Foreign Assets which moderated the expansion in the Net Domestic Assets (NDA) of the depository corporations sector. M2+ grew by 23.4 percent year-on-year in August 2022, compared with 20.2 percent in the same period of 2021.
