Ghana’s Private Sector Growth Moderates as Cedi Appreciation Cuts Prices

News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://www.newsghana.com.gh/ghanas-private-sector-growth-moderates-as-cedi-appreciation-cuts-prices/

Ghana’s private sector expanded for a fifth consecutive month in June, though at a slower pace, as currency-driven price declines prompted customers to delay purchases.

The S&P Global Ghana Purchasing Managers’ Index (PMI®) registered 51.3, down from May’s 53.6, signaling the softest growth since March.

A sharp appreciation of the cedi triggered the steepest reduction in input costs since the onset of the COVID-19 pandemic, leading businesses to cut output prices at the fastest rate in over five years.

New orders rose moderately, extending their expansion streak to five months, but growth eased as firms reported consumer hesitation amid expectations of further price drops. Business activity followed a similar trajectory, with the pace of increase weakening to a three-month low.

Employment levels, however, saw a solid uptick as companies filled vacancies and aligned staffing with production needs. Staff cost inflation subsequently eased to its weakest level since August 2023.

The data suggests potential relief for Ghana’s inflation trajectory, which could influence monetary policy. Andrew Harker, Economics Director at S&P Global Market Intelligence, noted: “Lower prices supported demand, but some buyers delayed purchases anticipating steeper discounts.”

Nearly 78% of surveyed firms remain optimistic about year-ahead prospects, citing reduced operational costs and hopes for exchange-rate stability.

Concurrently, Ghana’s fixed income markets showed robust activity, with significant trades in government securities on July 3.

The new Government of Ghana bond maturing February 2027 dominated volumes at GHS 220 million across 36 transactions, while corporate bonds like Cocobod’s August 2027 issue saw a single GHS 57 million trade.

These trends unfold under President John Mahama’s National Democratic Congress administration, which has prioritized economic stabilization since taking office in 2024.

The sustained private-sector growth aligns with Ghana’s solid Q1 GDP performance, though momentum moderated as the second quarter closed.

News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://www.newsghana.com.gh/ghanas-private-sector-growth-moderates-as-cedi-appreciation-cuts-prices/

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