Trade surplus to widen to 4.4% of GDP in 2022 – Fitch predicts – Citi Business News

Despite the current poor economic situation and predictions of a worse-case scenario due to further depreciation of the CDI and higher inflation rates, Fitch Solutions believes that Ghana’s trade surplus will exceed GDP in 2022 due to rising global commodity prices. Will increase from 4.4% to 1.4% in 2021. ,

Ghana recorded a trade surplus of $1.43 billion in the first half of this year, up from $886 million recorded during the same period last year.

This is equivalent to 2% of GDP.

According to a summary of economic and financial data from the Bank of Ghana, the country achieved $9 billion in the first six months of this year due to an increase in gold and crude oil exports.

This is because supply disruptions and risk-off sentiment after Russia’s invasion of Ukraine pushed up crude oil and gold prices, according to Fitch’s ‘IMF deal expected to strengthen Ghana’s weak external position’ It is Ghana’s two major export items – and in turn Ghana’s export earnings.

“We expect gold production to increase by 4%, supported by the launch of new gold mining projects and the integration of artisanal miners into Ghana’s formal gold mining sector,” the report said.

However, from a volume perspective, Fitch estimates that a 1.3% drop in oil production in 2022 indicates that Ghana will not be able to take full advantage of higher energy prices.

“Taking these dynamics into account, we anticipate a strong growth of 26.9% in merchandise exports in 2022, up from 1.8% in 2021.”

Fitch, in contrast, insists that the positive impact of a large trade surplus would be partially offset by a widening primary income deficit.

The research company expects external borrowing to continue, an increase in already high interest payments in 2022 and the primary income deficit to widen from 4.8% in 2021 to a forecast of 8.2% of GDP.

In addition, Fitch estimates that the current account deficit will widen to 3.5% of GDP in 2023.

The report said, “While the trade surplus will remain quite large by historical standards, it will narrow to 4.2% of GDP due to the fall in oil and gold prices. %, as easing price pressures will gradually improve financial conditions for households and businesses, increasing demand for imported goods and services.

Trade surplus to widen to 4.4% of GDP in 2022 – Fitch predicts

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