Ghana's real Gross Domestic Product (GDP) for 2007 fiscal year dropped to 6.2 percent from the 6.4 percent recorded in 2006, according to the Institute of Economic Affairs (IEA).
The 6.2 percent economic growth rate recorded for 2007 was also slightly below the government's target of 6.5 percent documented in the government's budget statement for 2007, IEA stated in its annual 2007 Economic Review and Outlook documents.
The Economic Review presents an overview of the performance of the economy during the 2007 calendar year and outlook for 2008 and beyond based on provisional data released by the Ghana Statistical Service.
The IEA report attributed the economic decline to a combination of factors, which included the nation-wide power rationing that ended in September 2007 as well as increases in the world market prices of crude oil.
The 2007 Economic Review and Outlook Survey was conducted by a team of economists including, Dr Kwabena Asomanin Anaman, Head of Economics and Director of Research at the IEA; Professor Alhassan Wayo Seini, IEA Senior Fellow; Professor John Asafu-Adjaye, IEA Senior Fellow and Mrs. Charity Osei-Amponsah, IEA Research Assistant.
Others are Dr. Daniel Bruce Sarpong, Senior Lecturer and Head, Department of Agricultural Economics and Agribusiness, University of Ghana; Dr. Kofi Marfo, Mrs Abigail Abandah-Sam; Matthew Armah and Martin Eson Benjamin, all Seniors Executive Officers of the Millennium Development Authority (MiDA), Accra.
The report stated that the 6.2 percent marginal growth in 2007 was largely achieved on the back of the services sector, the construction and mining industries.
The provisional fiscal outturn in 2007 showed that the total government expenditure was GH¢5,701.5 million as compared to total revenue of GH¢4,508.2 million.
The government budget deficit for 2007 was GH¢1,193.3 million, which was about 8.5 percent of the GDP based on commitments. The overall budget deficit for 2007 including divestiture sales of government assets was GH¢1,132.2 million equivalent to 8.1 percent of GDP.
According to the IEA Economic Review document, the deficit was higher than the 7.8 percent recorded in 2006.
On the agricultural sector, the IEA Economic Review document noted that growth in the industry was far below the target while there was a decline in the growth of the manufacturing industry, continuing the trend over the last decade of shrinkage in the industry during a period of continuous economic growth.
In 2007, the agriculture sector grew at a rate of 3.1 percent lower than the revised growth rate of 4.5 percent achieved by this sector in 2006. The growth rate of the agriculture sector was also significantly below the government's target of 6.1 percent contained in the government 2007 budget statement.
The IEA Economic Review document also recorded decline in the industrial sector, recording 6.6 percent from the 9.5 percent recorded in 2006.
The services sector, however, grew at an annual rate of 10.0 percent recorded in 2007, much higher than the 6.7 percent recorded in 2006.
In 2007, the services sector became the largest sector of the economy outstripping the agriculture sector of its dominant role.
The relatively weaker performance of the agriculture and industrial sectors, is of some concern as it indicates lower ability of the country to produce essential goods and commodities in the agriculture and industrial sectors for consumption and the sustainable development of the country, the IEA report stated. From Business Desk with additional files from GNA