In a recent forecast by Fitch Solutions, the Ghanaian economy appears poised for a modest uptick, with real household spending anticipated to expand by 3.9% year-on-year, culminating in a figure of ¢114.2 billion by 2024.
This cautious optimism is underpinned by a confluence of factors, notably the subsiding inflationary pressures and a reprieve in debt servicing obligations.
According to Fitch Solutions, consumer sentiment, a critical barometer of economic health, has witnessed fluctuations. Despite a slight uptick to 88.8 in April 2023, consumer confidence later receded to 87.5 by June 2023.
This tepid sentiment, although an improvement from the 79.7 recorded in June 2022, still falls short of the robust 96.5 average observed during the tumultuous year of the Covid-19 pandemic in 2020.
A myriad of headwinds confront Ghanaian consumers. Inflation, which has persistently hovered at an average of 33.4% year-on-year between October 2021 and July 2023, remains a palpable concern.
The inflationary backdrop, compounded by sluggish economic growth, burgeoning dissatisfaction with governmental policies, and successive interest rate hikes, has cast a shadow over consumer sentiment.
Evidence of this subdued sentiment is discernible in the realm of mobile money transactions—a pivotal indicator of consumer activity.
The value of such transactions contracted from a robust ¢159.7 billion in March 2023 to ¢149.4 billion by June 2023.
Moreover, the transaction volume witnessed a commensurate decline from 563 million in May 2023 to 532 million in the subsequent month.
While Fitch Solutions’ projection for 2024 offers a glimmer of hope, with anticipated household spending rising above the pre-pandemic levels of ¢101.9 billion recorded in 2019, Ghana’s economic narrative remains delicately poised. As the nation navigates these multifaceted challenges, stakeholders would do well to exercise vigilance, recognizing the intricate interplay of domestic and global factors shaping Ghana’s economic trajectory.