Domestic economic activity continues to reflect strong economic recovery from the adverse effects of the COVID-19 pandemic, the Bank of Ghana (BoG)’s latest report on the economy, has said.
The BoG July Monetary Policy Report on Real Sector Developments, issued in Accra, said the latest high frequency indicators recorded broad-based improvement in May 2021 compared to a year ago.
“Domestic VAT collections, industrial consumption of electricity, private sector contributions to social security, vehicle registration, port activity, cement sales and passenger arrivals at the airport all improved in the reviewed period,” the report said.
It said the Ghana Statistical Service reported an estimated Gross Domestic Product (GDP) growth of 3.1 per cent for the first quarter of 2021, indicating signs of strong recovery from the impact of the COVID-19 pandemic.
“The first quarter growth outturn was however lower than the pre-pandemic growth of 7.0 per cent recorded for the first quarter of 2020. Non-oil GDP grew by 4.6 per cent compared with 7.9 per cent growth over the same comparative period. In terms of sectors, Agriculture, Industry and Services all recorded positive growth rates of 4.3 per cent, 1.3 per cent and 4.0 per cent respectively,” the report said.
The BoG on Consumer Spending, explained that Domestic VAT collections and retail sales posted a positive performance in May 2021, compared with the same period in 2020.
“Domestic Value Added Tax (VAT) collections increased by 35.3 per cent on a year-on-year basis to GH¢536.10 million. On a month-on-month basis, domestic VAT collections declined by 13.0 per cent. Cumulatively, total domestic VAT for the first five months of 2021 went up by 31.7 per cent to GH¢2,728.77 million, compared with GH¢2,072.12 million for the same period of last year,” the BoG said.
The report indicated that retail sales increased by 30.4 per cent year-on-year to GH¢114.78 million in May 2021, up from the GH¢88.00 million recorded in the same period in 2020.
“In the first five months of 2021, retail sales grew by 39.0 per cent to GH¢560.64 million, due largely to increased household consumption during the review period,” the report said.
The BoG said its updated Composite Index of Economic Activity (CIEA) registered a strong annual growth of 33.1 per cent in May 2021, compared to a contraction of 10.2 per cent recorded in the corresponding period of 2020.
“The consumer and business confidence surveys conducted in June 2021 reflected mixed sentiments. Consumer confidence softened while business confidence remained somewhat unchanged from the previous survey period,” the report said.
The Consumer Confidence Index eased from 93.2 in April to 88.8 in June 2021 due to a variety of factors including the implementation of the recently announced revenue measures in the 2021 Budget.
However, the Business Confidence Index only dipped marginally from 96.9 in April to 96.3 in June 2021 and business sentiments remained broadly unchanged due to expectations of improvement in company growth prospects.
BY KINGSLEY ASARE
