Ghana Economy Surges in Q2 as Inflation Cools, Sparking Rate Cut Hope – Ghana’s economy saw a strong rebound in Q2 2024, with GDP growth surging to 8.5% amid dipping inflation. This positive economic data has analysts optimistic the central bank may cut interest rates soon.
Ghana Economy Surges in Q2 as Inflation Cools
The country’s economy roared back to life in the second quarter of 2024, posting a robust 8.5% growth in real GDP compared to the same period last year. This is a significant acceleration from the 4.8% growth recorded in Q2 2023 and easily surpassed the 2.8% expansion seen across the broader U.S economy during the same quarter.
The impressive GDP figures were accompanied by some equally encouraging news on the inflation front. Consumer price pressures continued to ease, with the personal consumption expenditures (PCE) price index – the Federal Reserve’s preferred inflation gauge – slowing to a 2.5% year-over year increase in July, down from 2.7% in the prior month.
This combination of strong growth and moderating inflation has analysts speculating that Ghana’s central bank may soon move to cut interest rates, providing a boost to businesses and households grappling with the impact of the central bank’s aggressive policy tightening over the past year.
The Q2 GDP data should give the Bank of Ghana some additional confidence that it can consider one or more interest cuts this year, but not more than that,” said Dana M. Peterson, Chief Economist at The Conference Board.
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Ghana has experienced economic growth over the past 30 years, with real GDP growth quadrupling and extreme poverty dropping by half. This has helped transform Ghana and move it to lower-middle-income country status. This growth has been driven by increased prices, and production of key exports like cocoa, gold and oil.
However, the growth has also come with significant environmental degradation that is negatively impacting Ghanaians. Air, water and plastic pollution are causing major health issues, costing the country nearly 11% of its GDP annually. Land degradation, deforestation and overfishing are also harming livelihoods. Climate change is further exacerbating these environmental challenges.
