The Ministry of Finance has announced its decision to update its debt sustainability analysis (DSA) and Gross Domestic Product (GDP) projections for 2022 to reflect positive economic developments in 2021.
The revision which will also capture the medium-term projections about the economy is based on the official provisional 2021 fourth quarter and overall 2021 annual GDP data released by the Ghana Statistical Service (GSS) on April 20, 2022.
According to the GSS, real GDP expanded by seven per cent in the fourth quarter of 2021 compared to the 4.3 per cent growth recorded in the corresponding period of 2020.
Similarly, non-oil real GDP in the fourth quarter of 2021 was said to have expanded by 7.6% compared to 5.7% for the same period in 2020.
The GSS also indicated that on an annual basis, the provisional real GDP growth for 2021 showed a positive outturn of 5.4%, exceeding the 4.4% 2021 projected outturn by one percentage point and the SSA average growth by 0.9 percentage points.
“This is a clear confirmation that the economy is on the rebound post the COVID-19 pandemic that saw a revised growth rate of only 0.5% in 2020.
The rate of debt accumulation is tapering off, and there is a slowdown in fiscal expansion with Ghana on track to return to the Fiscal Responsibility Act deficit threshold of five per cent of GDP by 2024,” the Ministry of Finance noted in statement released.
Data from the GSS also showed that non-oil real GDP expanded from 1.0 percent in 2020 to 6.9 percent in 2021, exceeding the target of 5.9% for the period.
The nominal GDP for 2021 was estimated at GH¢459,130.9 million, over GH¢18 billion more than the projected outturn of GH¢440,869.4 million for the period, up from GH¢391,940.7 million recorded in 2020.
The non-oil nominal GDP for 2021 is GH¢437,975.2, up from GH¢378,147.9 million in 2020.
The ministry, however, indicated that the major implication of higher-than-projected GDP outturn for 2021 is that all economic indicators expressed as a ratio of GDP would change to reflect the updated GDP data.
“These ratios include the debt to GDP ratio, a key factor in determining debt sustainability, the fiscal deficit to GDP ratio, and revenue to GDP ratio.
The new GDP data also has implications for the nominal 2022 GDP target and the growth rate as it is based on the 2021 GDP data which have now been updated,” the statement indicated.
It said the fiscal deficit, including energy and the financial sector, was showing a decline as a per cent of GDP from 15% to 14.7% of GDP for 2020.
Similarly, the fiscal deficit of 2021 has reduced from 11.7% to 11.4%.
“Ghana’s public debt stock expressed as percentage of GDP now stands at 76.6% of GDP at the end of 2021 compared to the earlier reported 80.1%.
Similarly, the 2020 debt stock has also reduced from 76.1% to 74.4%, a further confirmation that the rate of debt accumulation has slowed to pre-pandemic levels,” it added.
