THE sluggish nature of industries and companies coupled with the characteristic weak performance of the agriculture sector in the first quarter of every year has consequently dragged the economy backward, causing it to record a decline of 5.1 per cent in the first quarter of 2011.
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| Dr Kwabena Duffuor, Minister of Finance and Economic Planning |
The country’s GDP estimates for the first quarter of 2011 thus fell to GH¢6.66 billion, down by GH¢3.56 billion from the fourth quarter of 2010’s figure of GH¢7.02 billion.
The Government Statistician disclosed these at a media briefing in Accra to announce the first quarter GDP estimates of 2011 and the Producer Price Index (PPI) for May.
For six years running, first quarter GDP has often fell, a situation the Government Statistician attributed to “the strong seasonal nature of the agriculture sector,” a major contributor to the country’s GDP figures.
Industry, however recorded growth rate of 21.4 per cent, a significant leap from the previous quarter’s rate of 3 per cent while services grew by 5.3 per cent, a 2.9 per cent rise from the 2010 fourth quarter growth rate of 2.4 per cent.
These hikes in the services and industry sectors where however not enough to offset the abysmal performance of the agric sector and subsequently caused overall GDP to slope.
“The negative growth in GDP is characteristic of the first and second quarters of each year,” Dr Bediako said adding that the cyclical trend in the country’s agriculture output in the first quarters had caused the sector’s output to decline by 35.7 per cent from last quarter of 2011.
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| Dr Grace Bediako is Ghana Government Statistician |
In the first quarter of 2010, agriculture sector declined by 53 per cent and thus caused GDP for that quarter to decline to GH¢5.42 billion from the fourth quarter of 2009’s GDP estimates of GH¢6.41 billion.
The economy’s over reliance on the agric sector is thus a major contributor to this yearly dip in the country’s first quarter GDP.
On year-on-year outlook, however, the situation was positive. Year-on-year GDP which measures the monetary value of goods and services produced in the first quarter of this year as compared to those produced in the first quarter of 2010 was valued at GH¢6.66 billion, up by GH¢1.24 billion from the 2010 first quarter GDP of GH¢.,42 billion.
The massive rise in 2011 first quarter when compared with that of 2010 was hugely influenced by significant growth rates recorded in the crops (mainly cocoa), mining and quarrying (influenced by crude oil production), manufacturing, construction as well as other sub-sectors.
Meanwhile, the month-on-month Producer Inflation which measures the monthly average changes in the (factory gate) prices received by domestic producers and manufacturers for their goods and services rose by 0.74 per cent in May from the April month-on-month rate of 0.63 per cent.
Consequently, domestic producers and manufacturers received higher factory gate prices (prices fixed and received by manufacturers and producers at the factory gate prior to them getting into the hands of wholesalers) for their respective goods and services produced within May as compared to those received in April.
The year-on-on-year producer inflation, however, declined to 23.80 per cent in May, the first fall in the producer inflation in thirteen months.
The May producer inflation of 23.80 per cent indicated a 0.49 per cent decline compared to the April rate of 24.29 per cent.
Year-on-year producer inflation has been witnessing a consistent rise in the past 12-months, with the highest rate recorded in April this year.
In the sector by sector outlook, the utilities sector recorded the highest year-on-year inflation change of 71.84 per cent while the manufacturing sector recorded 32.60, the least in the sector by sector outlook.
Mining and quarrying, however recorded the highest monthly producer inflation changes of 1.36 per cent with the utilities sector recording a no change, the lowest in the sector-by-sector comparison.
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