Business confidence improves, but consumer confidence remains unchanged – BoG

BoG Governor, Dr. Ernest Addison

The Bank of Ghana’s (BoG) latest confidence surveys conduct­ed in October 2024 revealed a sustained recovery in business sentiments.

While consumer confidence was broadly unchanged, business confidence improved as firms met their short-term targets and expressed optimism about company and industry prospects.

A statement issued by the BoG after the 121 regular meeting of the Monetary Policy Commit­tee (MPC) on Friday in which the Committee maintained the policy rate (the rate at which the

BoG lends to commercial banks) at 27 per cent, said the survey’s findings were broadly consistent with trends observed in Ghana’s Purchasing Managers’ Index (PMI), which also signalled an im­provement in business conditions.

The PMI increased to 50.6 in October 2024, up from 49.1 in September.

Meanwhile, in the domestic economy, high-frequency indica­tors point to continued improve­ment in economic activity.

In the third quarter, the Central Bank’s high-frequency real sector indicators pointed to a sustained pick-up in economic activity.

The updated real Compos­ite Index of Economic Activity (CIEA) recorded an annual growth of 2.2 per cent in Sep­tember 2024, compared to a contraction of 0.4 per cent in the corresponding period of 2023.

“Major drivers of the im­provement in economic activity include increased in port activity, households and firms consump­tion of goods and services, con­struction activities, credit to the private sector, and higher tourist arrivals,” the statement said.

The BoG said the domes­tic macroeconomic conditions remained stable, and the Interna­tional Monetary Fund (IMF)-Ex­tended Credit Facility programme implementation remained on track.

“Data observed through Octo­ber 2024 indicated broad stability in the macroeconomic indicators. Growth outturn so far has been strong, and leading indicators of economic activity are projecting stronger growth in the second half of the year; business and consumer confidence is slowly turning around, core inflation remains broadly stable, the fi­nancial sector inflation expecta­tions remain broadly anchored, reserve build-up has been suffi­cient to provide confidence, and the currency is recording some appreciation, the BoG explained.

Moreover, it stated that the third review assessment of the IMF on the economy and on programme implementation also reflected a positive assess­ment and led to a Staff level Agreement. Indications are that the IMF Board will meet in December to assess programme implementation thus far and as­sess forward-looking prospects of the economy.