Ghana’s Economy 75% Bigger than Previously Estimated (Update1)

Nov. 5 (Bloomberg) -- Ghana’s economy is 75 percent bigger than previously calculated, the country’s Statistical Service said, slashing the relative size of the fiscal deficit and the current account shortfall.

The West African nation’s gross domestic product this year is 44.8 billion cedis ($31.2 billion), compared with the previous estimate of 25.6 billion cedis, Grace Bediako, head of the Accra-based agency, told reporters today.

“The revisions will be a huge positive for the relative risk matrix” of Ghana, Stephen Bailey-Smith, an analyst at Standard Bank Plc in London, said in a note to clients. The changes “should foster a rating upgrade.”

The yield on Ghana’s 91-day Treasury bills is about 12.4 percent, compared with inflation of 9.4 percent, after the government posted budget deficits equivalent to 14.5 percent of

GDP in 2008 and 9.7 percent in 2009. The International Monetary Fund said on Oct. 1 that the shortfall may exceed the 8 percent target this year. Those figures are now significantly smaller.

The statistics service also raised its growth forecast for this year to 6.6 percent from 5.9 percent, and revised up its calculations for the previous three years. GDP expanded 4.7 percent in 2009, 8.4 percent in 2008 and 6.5 percent in 2007, compared with previous estimates of from 4.1 percent, 7.2 percent and 5.7 percent.

Economic growth slowed in 2009 after the government embarked on an austerity program to bring down the budget deficit.

Stocks Rally

Ghanaian stocks erased earlier losses, climbing 2.83, or less than 0.1 percent, to 6,910.71 by 12:54 p.m. in Accra. The measure earlier retreated 0.1 percent.

The size of the economy was revised up after new economic activities were added,  methodology was improved and the base year was shifted to 2006 from 1993, Bediako said.

“The new data series includes activities of the oil sector, forest plantations and information and communication, which were not included in previous estimates,” she said.

The new GDP places Ghana among middle income countries, as defined as those with a per capita income of more than $976 a year, Bediako said. Ghana’s is now $1,318.36.

Ghana’s economic growth may average about 8 percent in the next three to five years, as oil production starts from the West African nation’s Jubilee oil field December, Kofi Wampah, deputy central bank governor said Oct. 7.

Wampah said the economy may expand 10 percent to 15 percent next year, slower than Finance Ministry’s prediction of 20 percent.

For Related News and Information:

To contact reporter on this story:

Moses Dzawu in Accra at +233-302-258-797 or

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To contact the editor responsible for this story:

Antony Sguazzin at +27-11-286-1934 or

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