Governor of the Bank of Ghana (BoG), Dr Ernest Addison has said information from the BoG’s updated Composite Index of Economic Activity (CIEA) shows that the observed strong growth momentum will likely persist in the first quarter of 2022.
The CIEA recorded an annual growth of 4.6 percent in March 2022, compared to 4.2 and 4.4 percent in January and February, respectively.
Available data show that exports are picking up, credit to the private sector continues to recover, together with an uptick in industrial
production, Dr Addison said at the Monetary Policy Committee press conference in Accra on Monday May 23.
He said the improvement in Domestic VAT suggests demand is picking up, and higher tourist arrivals were also recorded.
“These were the variables that drove the rise in the index,” Dr Addison added.
He further indicated that the pace of growth in broad money supply slowed in April 2022 on account of a contraction in Net Foreign Assets (NFA) of the banking sector, despite significant expansion in Net Domestic Assets. Annual growth in M2+ moderated to 19.9 percent in April 2022, compared with 25.8 percent in the same period
“In terms of components, the moderation in M2+ was reflected in currency outside banks, demand deposits, and savings and time deposits. Foreign currency deposits, however, recorded some growth over the review period. Annual growth in reserve money was 33.8 percent, compared with 32.0 percent growth, over the same comparative period.
“Credit to the private sector showed considerable improvement, almost back to pre-pandemic levels and broadly in line with the uptrend in economic activities. In nominal terms, private sector credit recorded a significant annual growth of 26.5 percent in April 2022, compared with 6.9 percent, in April 2021.
“In real terms, however, private sector credit grew by 2.3 percent, due to sustained price pressures, relative to a contraction of 1.5 percent recorded for the same comparative period. In terms of new advances, the data shows that credit growth continued to improve, reaching GH¢16.4 billion, representing a 56.5 percent year-on-year growth. The latest credit conditions survey revealed that banks are
however beginning to tighten credit stance on loans to enterprises and households. Despite the tightening of credit conditions, demand for credit by households and firms continue to remain strong.”
By Laud Nartey|3news.com|Ghana