In addition to updated fourth-quarter projections, today’s announcement includes revised third-quarter 2021 wages and salaries, personal taxes, and government social insurance contributions, all based on new data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages program. Wages and wages climbed by $306.8 billion in the third quarter, up $27.7 billion from the previous estimate. With the addition of this new statistics, real gross domestic income is now anticipated to have climbed 6.4 percent in the third quarter, a 0.6 percentage point gain over the prior estimate.
GDP for 2021
In 2021, real GDP climbed by 5.7 percent, unchanged from the previous estimate (from the 2020 annual level to the 2021 annual level), compared to a 3.4 percent fall in 2020. (table 1). In 2021, all major components of real GDP increased, led by PCE, nonresidential fixed investment, exports, residential fixed investment, and private inventory investment. Imports have risen (table 2).
PCE increased as both products and services increased in value. “Other” nondurable items (including games and toys as well as medications), apparel and footwear, and recreational goods and automobiles were the major contributors within goods. Food services and accommodations, as well as health care, were the most significant contributors to services. Increases in equipment (dominated by information processing equipment) and intellectual property items (driven by software as well as research and development) partially offset a reduction in structures in nonresidential fixed investment (widespread across most categories). The rise in exports was due to an increase in products (mostly non-automotive capital goods), which was somewhat offset by a drop in services (led by travel as well as royalties and license fees). The increase in residential fixed investment was primarily due to the development of new single-family homes. An increase in wholesale commerce led to an increase in private inventory investment (mainly in durable goods industries).
In 2021, current-dollar GDP climbed by 10.1 percent (revised), or $2.10 trillion, to $23.00 trillion, compared to 2.2 percent, or $478.9 billion, in 2020. (tables 1 and 3).
In 2021, the price index for gross domestic purchases climbed 3.9 percent, which was unchanged from the previous forecast, compared to 1.2 percent in 2020. (table 4). Similarly, the PCE price index grew 3.9 percent, which was unchanged from the previous estimate, compared to a 1.2 percent gain. With food and energy prices excluded, the PCE price index grew 3.3 percent, unchanged from the previous estimate, compared to 1.4 percent.
Real GDP grew 5.6 (revised) percent from the fourth quarter of 2020 to the fourth quarter of 2021 (table 6), compared to a fall of 2.3 percent from the fourth quarter of 2019 to the fourth quarter of 2020.
From the fourth quarter of 2020 to the fourth quarter of 2021, the price index for gross domestic purchases climbed 5.6 percent (revised), compared to 1.4 percent from the fourth quarter of 2019 to the fourth quarter of 2020. The PCE price index grew 5.5 percent, unchanged from the previous estimate, versus a 1.2 percent increase. The PCE price index grew 4.6 percent excluding food and energy, which was unchanged from the previous estimate, compared to 1.4 percent.
How is Ghana’s economy doing right now?
Ghana borders Togo, Cote d’Ivoire, and Burkina Faso on the Atlantic Ocean. It has a population of around 29.6 million people (2018). It has made significant progress toward democracy under a multi-party system in the last two decades, with its independent judiciary gaining public trust. Ghana has routinely ranked among Africa’s top three countries for freedom of expression and press.
After the Supreme Court dismissed the opposition’s election petition, President Nana Akufo-Addo was re-elected, giving the ruling New Patriotic Party a second term. The success of President Akufo-second Addo’s term will be determined by his ability to keep his campaign pledges and execute economic diversification in the face of rising debt.
The COVID-19 epidemic, the March 2020 shutdown, and a dramatic drop in commodity exports all slowed Ghana’s rapid growth. The economy grew at an average of 7% from 2017 to 2019, before contracting sharply in the second and third quarters of 2020.
The slowdown in the economy has a significant impact on households. The poverty rate is expected to rise slightly from 25% in 2019 to 25.5 percent in 2020, according to estimates.
In 2020, the whole fiscal deficit will have increased to 15.2 percent. Ghana’s public debt climbed to 81.1 percent of GDP in 2020, putting the country at risk of default. Despite a significant downturn in mining and the pandemic’s second wave, growth accelerated in the first and second quarters of 2021.
According to preliminary fiscal figures for the first half of 2021, the government lowered spending to compensate for revenue shortfalls. The fiscal deficit as a percentage of GDP was 5.1 percent.
As the pandemic-induced food price shock subsided, headline inflation stayed low at 7.8% in June 2021, prompting the Bank of Ghana to cut its policy rate by 100 basis points to 13.5 percent in May to aid the recovery. However, due to rising food and non-food inflation, inflation increased by 9.7% in August.
Imports grew faster than exports in early 2021, fueled by the domestic recovery, while commodity demand remained muted. As a result, the current account deficit increased in the second quarter of 2021, rising from 0.8 percent of GDP to 1.3 percent of GDP.
Due to rising commodity prices and robust domestic demand, Ghana’s economy is expected to gradually recover over the medium term. Ghana got $1 billion in SDRs from the IMF recently, a portion of which would be used to aid economic recovery. In the years 2021-23, annual growth is predicted to average 5.1 percent. Real per capita GDP is expected to rebound to pre-COVID-19 levels in 2021, after dropping by 1.7 percent in 2020.
As the government pursues its economic stimulus program, the fiscal deficit is anticipated to remain high. It is expected to fall to 14% of GDP in 2021 and 9.5 percent in 2023, still exceeding Ghana’s 5% cap.
The energy sector continues to put the country’s finances in jeopardy. In recent years, sector expenses have outstripped receipts, costing the budget around 1-2 percent of GDP yearly.
What is the state of Ghana’s economy in 2020?
Ghana’s economic growth was substantially slowed by the COVID19 epidemic. Due to the drop in oil prices and weakening global economic activity, real GDP growth is expected to slow from 6.5 percent in 2019 to 1.7 percent in 2020. Nonetheless, a burgeoning rebound in the construction and industrial sectors, as well as favorable gold and cocoa prices, will keep expansion going. Due to pandemic-related supply chain disruptions and expansionary monetary policies intended at alleviating the economic repercussions of COVID19, inflation is predicted to reach 10% in 2020, up from 8.7% in 2019. Due to revenue shortfalls from weak economic activity and unanticipated increases in health expenditure, the budget deficit is forecast to rise to 10.5 percent of GDP in 2020, up from 4.8 percent in 2019. Because of lower import demand, the current account deficit is forecast to shrink to 2.5 percent of GDP in 2020, down from 2.8 percent in 2019. As of October 2020, foreign exchange reserves were at the same level as the previous year, covering 4.0 months of imports. In 2020, the Ghana cedi depreciated by 3.1 percent, compared to a depreciation of 10% in 2019. Due to solvency and liquidity vulnerabilities, Ghana remains at high risk of financial distress in the International Monetary Fund’s 2019 Debt Sustainability Analysis. In September 2020, the public debt-to-GDP ratio increased to 71 percent, up from 63 percent a year earlier. A banking sector reform, which included bank recapitalization and the liquidation of insolvent financial firms, has improved the sector’s overall resilience. According to firm and household polls, around 770,000 people had their earnings slashed and 42,000 people lost their jobs during the partial lockdown.
In the short to medium term, the economy looks promising, assuming increased export demand, greater company confidence, and the successful execution of the Ghana COVID19 Alleviation and Revitalization of Enterprise Support program. In 2021, growth is expected to reach 4%, followed by 4.1 percent in 2022. Inflation is predicted to fall to 8.2% in 2021 and 8% in 2022, putting it in the middle of the Bank of Ghana’s goal range of 6%10%. Because of planned increases in revenue collection in a strengthening economy, the fiscal deficit is expected to reduce to 7.2 percent in 2021 and 5.7 percent in 2022. However, as import quantities return to pre-pandemic levels, the current account deficit is forecast to increase to 2.8 percent of GDP in 2021 and 3.2 percent in 2022. A possible second wave of the virus, as well as increased fiscal and debt constraints, pose downside risks to the forecast.
Fiscal and debt problems are projected to limit Ghana’s capacity to propel economic growth back to pre-crisis levels. Only in 2024 is it projected that the country would revert to its fiscal responsibility budget deficit target of 5% of GDP. Because nearly half of all external debt was commercial, the public debt had cost escalation risks as of the end of 2019. Because 90% of domestic debt has short- to medium-term maturities and 70% of foreign currency debt is denominated in US dollars, it also revealed refinancing and foreign exchange rate risks. Domestic resource mobilization must be supplemented with external financial support, particularly concessional loans, to mitigate these risks. While maintaining the foreign exchange reserves buffer, the government should actively engage its creditors in exploring other financing options such as debt renegotiating and restructuring, as well as debt service suspension.
In Ghana, how is GDP calculated?
Gross domestic product (GDP) at purchaser’s prices is the sum of gross value contributed by all resident producers in the economy, plus any product taxes, minus any subsidies not included in the product value. It is estimated without taking into account depreciation of manufactured assets or natural resource depletion and degradation. The figures are in current US dollars. GDP numbers in dollars are converted from domestic currencies using official exchange rates from a single year.
What is the current GDP?
Retail and wholesale trade industries led the increase in private inventory investment. The largest contributor to retail was inventory investment by automobile dealers. Increases in both products and services contributed to the increase in exports. Consumer products, industrial supplies and materials, and foods, feeds, and beverages were the biggest contributions to the growth in goods exports. Travel was the driving force behind the increase in service exports. The rise in PCE was mostly due to an increase in services, with health care, recreation, and transportation accounting for the majority of the increase. The increase in nonresidential fixed investment was mostly due to a rise in intellectual property items, which was partially offset by a drop in structures.
The reduction in federal spending was mostly due to lower defense spending on intermediate goods and services. State and local government spending fell as a result of lower consumption (driven by state and local government employee remuneration, particularly education) and gross investment (led by new educational structures). The rise in imports was mostly due to a rise in goods (led by non-food and non-automotive consumer goods, as well as capital goods).
After gaining 2.3 percent in the third quarter, real GDP increased by 6.9% in the fourth quarter. The fourth-quarter increase in real GDP was primarily due to an increase in exports, as well as increases in private inventory investment and PCE, as well as smaller decreases in residential fixed investment and federal government spending, which were partially offset by a decrease in state and local government spending. Imports have increased.
In the fourth quarter, current dollar GDP climbed 14.3% on an annual basis, or $790.1 billion, to $23.99 trillion. GDP climbed by 8.4%, or $461.3 billion, in the third quarter (table 1 and table 3).
In the fourth quarter, the price index for gross domestic purchases climbed 6.9%, compared to 5.6 percent in the third quarter (table 4). The PCE price index climbed by 6.5 percent, compared to a 5.3 percent gain in the previous quarter. The PCE price index grew 4.9 percent excluding food and energy expenses, compared to 4.6 percent overall.
Personal Income
In the fourth quarter, current-dollar personal income climbed by $106.3 billion, compared to $127.9 billion in the third quarter. Increases in compensation (driven by private earnings and salaries), personal income receipts on assets, and rental income partially offset a decline in personal current transfer receipts (particularly, government social assistance) (table 8). Following the end of pandemic-related unemployment programs, the fall in government social benefits was more than offset by a decrease in unemployment insurance.
In the fourth quarter, disposable personal income grew $14.1 billion, or 0.3 percent, compared to $36.7 billion, or 0.8 percent, in the third quarter. Real disposable personal income fell 5.8%, compared to a 4.3 percent drop in the previous quarter.
In the fourth quarter, personal savings totaled $1.34 trillion, compared to $1.72 trillion in the third quarter. In the fourth quarter, the personal saving rate (savings as a percentage of disposable personal income) was 7.4 percent, down from 9.5 percent in the third quarter.
In 2021, real GDP climbed 5.7 percent (from the 2020 annual level to the 2021 annual level), compared to a 3.4 percent fall in 2020. (table 1). In 2021, all major subcomponents of real GDP increased, led by PCE, nonresidential fixed investment, exports, residential fixed investment, and private inventory investment. Imports have risen (table 2).
In 2021, current-dollar GDP expanded by 10.0 percent, or $2.10 trillion, to $22.99 trillion, compared to 2.2 percent, or $478.9 billion, in 2020. (tables 1 and 3).
In 2021, the price index for gross domestic purchases climbed by 3.9 percent, compared to 1.2 percent in 2020. (table 4). Similarly, the PCE price index grew 3.9 percent, compared to 1.2 percent in the previous quarter. The PCE price index climbed 3.3 percent excluding food and energy expenses, compared to 1.4 percent overall.
Real GDP rose 5.5 percent from the fourth quarter of 2020 to the fourth quarter of 2021 (table 6), compared to a 2.3 percent fall from the fourth quarter of 2019 to the fourth quarter of 2020.
From the fourth quarter of 2020 to the fourth quarter of 2021, the price index for gross domestic purchases grew 5.5 percent, compared to 1.4 percent from the fourth quarter of 2019 to the fourth quarter of 2020. The PCE price index climbed by 5.5 percent, compared to 1.2 percent for the year. The PCE price index increased 4.6 percent excluding food and energy, compared to 1.4 percent overall.
Source Data for the Advance Estimate
A Technical Note that is issued with the news release on BEA’s website contains information on the source data and major assumptions utilized in the advance estimate. Each version comes with a thorough “Key Source Data and Assumptions” file. Refer to the “Additional Details” section below for information on GDP updates.
Is Ghana wealthy or impoverished?
livelihood. In 1992, income distribution was extremely unequal, with the poorest 10% of the population earning only 3.4 percent of total household income while the wealthiest 10% earned 27.3 percent.
While Ghana is regarded one of the world’s least developed countries, it has one of Africa’s fastest expanding economies. It is a low-income economy; GDP per capita in 1999 was US$1,900, based on purchasing power parity conversion (which accounts for Ghana’s low prices of many essential commodities). Between 1985 and 1995, the rate of per capita income growth averaged 1.4 percent per year, increasing to 1.7 percent per year between 1996 and 1997, resulting in a significant increase in living standards. Ghana’s GDP per capita growth is critical in reducing poverty, with every 1% increase in GDP per capita reducing poverty by 2%. As a result, the 1.7 percent GDP per capita growth rate lifts nearly 200,000 people out of poverty each year.
Ghana was ranked 129th out of 174 nations on the UN Human Development Index in 1998, making it one of the few African countries to reach a medium level of human development. This designates Ghana as one of the countries with income, health care, and educational facilities that fall halfway between the high human development countries of Europe, North America, and Australasia and the world’s poorest and most deprived countries, mostly in Africa, where many people lack adequate food and lack access to health and educational services.
Why is Ghana so impoverished?
- The country’s economy was classified as middle-class in 2011. Ghana attained this position through increasing its work force’s skill level and geographical mobility.
- Despite the country’s expanding economy, poverty still exists in Ghana. Poverty has spread from urban to rural sections of the country, with rural poor nearly four times higher than urban poverty.
- The rate of poverty reduction has slowed in recent years, according to UNICEF. Since 2006, the annual decline rate has been barely 1.1 percent.
- The northern area of Ghana has the highest proportion of impoverished individuals. The poverty rate in the northern region has declined from 55 percent to 50 percent since the 1990s.
- In Ghana, children are 40 percent more likely than adults to be poor. According to UNICEF, 1.2 million households are unable to provide appropriate nourishment for their children.
- Poverty in Ghana is caused by a variety of factors, including overcrowding and homelessness. Many homes in the country, according to Habitat for Humanity, lack ventilation and basic amenities.
- Cholera outbreaks are widespread in more remote regions due to a shortage of indoor toilets. Using the restroom in public pits or outside adds to the spread of infectious diseases.
- According to the World Food Program, 27% of households in Ghana are at risk of being hungry. A third of the population subsists on less than $1.25 a day, making food acquisition extremely difficult.
- Infant mortality rates were lowered in half in 2006, despite the country’s poor healthcare. Despite having the majority of the population, the northern regions have only 9% of hospitals. Citizens in Ghana’s northern area must travel long distances to reach hospitals, which can be costly.
Ghana owes China how much money?
Ghana has obtained a 20 million yuan RMB (22.195 billion) interest-free loan from the Chinese government. Hon. Li Jinzhang, China’s Assistant Minister for Foreign Affairs, who was in Ghana on a working visit at the invitation of the Ghanaian Foreign Ministry, and Hon. Kwadwo Baah-Wiredu, Ghana’s Minister of Finance and Economic Planning, signed the agreement on August 30th in Accra. The loan is the eleventh interest-free loan granted by the Chinese government to Ghana.
Another agreement between Ghana and China is that the Chinese government will send a team of experts to Ghana to undertake a preliminary feasibility study on the railway repair project. When Hon. Li paid him a courtesy call at the Castle in Osu on the same day, President J. A. Kufuor informed him of this.
The President praised the two nations’ close relations and thanked the Chinese government for the financial help it has provided to Ghana over the years, as well as the countless development initiatives that China and Ghana have undertaken together. He repeated his appreciation for the excellent work being done by the Chinese road construction company, which was in charge of segments of the Accra-Kumasi and Madina-Aburi road projects. President Kufuor emphasized the importance of Ghana and China strengthening bilateral relations and exploring potentials for mutual benefit.
Hon. Li, for his part, praised the friendly relations that had existed between the two countries over the years, noting that the Chinese government admired President Kufuor’s efforts to improve relations between the two countries. He claimed that China and Ghana, which was one of the first African countries to establish diplomatic relations with China, had a lot in common. Hon. Li also highlighted the Chinese government’s desire to strengthen cooperation with Ghana in all areas for the benefit of the two nations and peoples.
Hon. Li had previously met with Ghana’s Minister of Foreign Affairs, Hon. Akufo-Addo, and shared opinions on a number of international issues. H. E. Zhang Keyuan, Chinese Ambassador to Ghana, was also present at the above-mentioned meetings.
What African country has the lowest GDP?
Burundi is the poorest country not only in Africa, but also in the world, according to per capita GDP and GNI statistics from 2020. Somalia, Africa’s second poorest country, has the same distinction. In fact, much of the list follows this trend. With the exception of Afghanistan, an Asian country with a GNI per capita of $500, which would put it at #6 on the second list, Africa’s ten poorest countries are statistically the world’s ten poorest. To be honest, this ranking comes with one major caveat: it’s probable that more non-African countries, particularly North Korea, Syria, and/or Yemen, might feature in the bottom ten if they disclosed their GDP/GNI data openly, but they normally don’t. African countries, though, would still account for the majority of the list.
When looking at the data in isolation, it can be difficult to appreciate the magnitude of Africa’s economic issues. To put things in perspective, we might look at the GDP figures of the world’s wealthiest countries. Luxembourg has the greatest GDP per capita (PPP int.$) according to 2020 data, with a value of $118,356more than 150 times more than Burundi’s $771. Similarly, Norway’s world-leading 2020 GNI per capita (Atlas method, current US$) of $78,250 appears modest until one considers that it is 289 times larger than Burundi’s $270. The economic situation in Africa may not always be so dire. Over the last two decades, a few African countries have experienced tremendous economic growth and development. Many Africans may have a more promising economic future if this progress can be sustained and expanded. See the table below for a complete list of African countries and its 2020 GNI per capita (Atlas approach, current US$).
Which African country is the most developed?
With an HDI of.804, Mauritius is Africa’s most developed country, narrowly missing out on the “very high human development” criteria. Mauritius is noted for its modern economy, free health care, and education, and has a life expectancy of 75 years and a literacy rate of 91.3 percent. Mauritius still ranks 66th out of 189 countries studied globally, demonstrating the continent’s disparity with the rest of the world, but other African countries can learn from the country’s achievements. Seychelles (7.96) is ranked 67th, just behind Mauritius. Tourism is the country’s main source of revenue, and its GDP has expanded approximately sevenfold since 1976. Algeria is Africa’s third most developed country, with an HDI score of.748. With a life expectancy of 76.3 years, Algeria has the greatest life expectancy of all African countries. Check out the table below to see how each African country ranks on the Human Development Index.