Economy expands by 23%

The country’s economy grew by an annual 23 percent in the first quarter of this year compared to the same period a year ago, latest real Gross Domestic Product (GDP) estimates show.

The increase was due largely to exports of oil and significant improvements in cocoa, mining and quarrying.

The government forecasts oil revenues of US$400 million this year after commercial oil production began last December. This, it expects, will help boost economic growth to around 13 percent this year, from 7.7 percent in 2010.

Oil output is nearing a peak of 120,000 barrels a day, with millions already exported to refineries in Europe.

Addressing a news conference in Accra, Government Statistician, Dr. Grace Bediako, said the quarter-on-quarter estimate of real GDP declined by 5.1 percent in first quarter 2011 - due mainly to seasonal agricultural trends.

She said agriculture shrank by 35.7 percent in the first quarter from the fourth quarter of last year due to seasonal patterns.

“Primarily because of the negative growth in agriculture, we have an overall negative GDP growth in the first quarter [compared to three months before],” she said.

She explained that on quarter-on-quarter basis, industry recorded the highest growth of 21.4 percent among the major sectors.

Within the sector, mining and quarrying rebounded from the previous quarter’s decline with the introduction of crude oil, increasing the subsector’s output by 136.1 percent, while construction output rose by 21.3 percent and electricity by 3.2 percent.

Output of manufacturing and water declined by 7.0 and 1.2 percent respectively, offsetting further increases in the industrial sector’s growth.

Output in the service industries rose by 5.3 percent, mainly due to significant growth in the several subsectors, namely transport and storage, which increased by 11.5 percent; hotels and restaurants, by 17.4 percent; business services, by 19.7 percent; and personal service activities, by 14.2 percent.

Data on the external sector also reveal improving indicators, according to the Bank of Ghana. Total merchandise exports grew 62 percent year-on-year in the first quarter, recording US$3 billion and outpacing growth in imports by some 30 percentage points.

Oil exports were valued at US$484.2 million, while cocoa beans and products earned US$859.4 million, a 26 percent increase year-on-year. Gold receipts came in at US$1.2 billion.

Import expenditure was US$3.3 billion and the trade deficit narrowed to US$284.6 million in the period.

The Government Statistician said judging by historical trends, growth will likely be stronger in the third and final quarters of the year.

Last year, real GDP growth was 7.7%, a strong rebound from 4% growth in 2009. The services sector was the main driver, growing by 9.8%.