News Guide Africa

Tag: Databank

  • Databank maintains Ghana’s growth rate forecast for 2025 at 4.5%

    Databank maintains Ghana’s growth rate forecast for 2025 at 4.5%

    Databank Research has maintained its end-of-year real Gross Domestic Product (GDP) growth forecast at 4.5% ± 100 basis points.

    In its second half-year outlook, it expects increased infrastructure investment, particularly in roads, to boost industrial activity.

    “We expect stable agriculture output and moderate growth in services to support this outlook”, it added.

    “However, we revise our quarter 2, 2025,forecast down from 5.6% to 4.8%, reflecting the seasonal effect on cocoa output and softer momentum in services, even as industry gains pace on the back of strong gold exports”, it stressed.

    “We expect the industry sector to expand by 4.9% in quarter 2, 2025, up from 3.4% in quarter one 2025. We foresee increased government funding for road infrastructure aiding this growth, with strong gold export receipts likely offsetting softer oil and gas output”, it continued.

    It projected the services sector to grow by 6.1% in quarter 2 2025, up from 5.9% in quarter one 2025.

    It noted that easing cost pressures and softer interest rates amid a stable cedi run should support growth in trade, information and communication, and financial services subsectors, highlighting that ongoing digital transformation programmes are expected to improve consumer spending, sustaining growth momentum.

    For the agriculture sector, it pointed out that its forecast points to an expected growth rate of 3.3% in the second quarter of 2025, down from 6.6% in the first quarter of 2025, as seasonal cocoa shortfalls weigh on performance. “However, we acknowledge potential for a rebound in quarter 3, 2025, with optimism that improved food supplies will be supported by funding and policies under the Agriculture for Economic Transformation Agenda programme”.

    Ghana’s real GDP including oil expanded by 5.3% year-on-year the first quarter of 2025, up from 3.4% in the 4th quarter of 2024 and above the 4.9% recorded in quarter one 2024.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • Cedi to gain strength this week… as MPC decisions take full effect – Analyst

    Cedi to gain strength this week… as MPC decisions take full effect – Analyst

    Adnan Adams Mohammed

    The recent monetary measures announced by the Bank of Ghana is expected to impact on the exchange rate this week, thus, giving the local currency a feet stand against the U.S dollar, an economist has said.  

    The senior economist with databank indicated that, checks from some forex bureaus and commercial banks show that the cedi is gaining marginal strength against the dollar as at the time of interview, last week, as the local currency was trading averagely at GH¢7.84 to the dollar on the retail market, compared to about ¢8.06 couple of days before the Central bank’s announcement last week. However, the Bank of Ghana pegs the cedi to the dollar at ¢7.112 (mid-rate).

    The Central bank, last week, announced a significant increase in the policy rate by 2.5 percent to 17% from a previous 14.5%. This is expected to entice investors to acquire cedi denominated instruments because of the attractive yields. Though cost of borrowing will go up, increasing cost of living and doing business, the Bank will in the interim mop up excess liquidity in order to control inflation and reduce interest in the dollar denominated assets. But, the economist said, its early days to predict the fortunes of the cedi, the market will definitely react to the policy decisions by the Central Bank.

     “In the interim, we’ll say its early days yet. In addition to that, the cedi also has a history about its performance so from the weeks ahead, we’ll start to analyse the foreign exchange market to see how the cedi will respond to some of these announcements”, Senior Economic and Currency Analyst at Databank Research, Courage Martey said.  

    “But on the face of it, this appeared to be good measures; aggressive and decisive measures from the Central Bank which we expect to be backed by the fiscal measures, so that going forward, the market – at least sentiments – should start to improve. Once it’s starts to improve, we should start to see it reflecting in the pricing behavior of participants on the market”, he added.

    The MPC’s decision in the interim is expected to mop up excess liquidity in order to control inflation and reduce interest in the dollar denominated assets.

    “When Cedi liquidity finally tightens, what you might see is that, those hoarding dollars in their accounts will not want to go and borrow expensive cedi. They will rather have to sell their dollar holdings to buy cedis and that could increase the supply of dollars on the market and slow down the pace of depreciation”, Mr. Martey stated.

    Beyond the policy rate, the Bank of Ghana announced measures which will take effective from April 1st, 2022,

    The measures in relation to universal banks include an increase in the Cash Reserve Ratio to 12%; the Capital Conservation Buffer reset to the pre-pandemic level of 3%, making the Capital Adequacy Ratio a total of 13% and the provisioning rate for loans in the Other Loans Exceptionally Mentioned (OLEM) category reset to the pre-pandemic level of 10%.