The BoG’s Composite Index of Economic Activity (CIEA), measured on a year on year basis, contracted sharply during the period under review.
This according to the Bank of Ghana was a complete reversal of the 5.6 percent growth in the index recorded over the previous 12-month period.
The report further noted that a recovery into positive territory as soon as the following month of June is highly unlikely.
Tourist arrivals, on the other hand, remained at a standstill due to the border closure and travel restrictions.
The governor further noted that the country’s imports, domestic VAT and exports have all been impacted negatively.
Addison however noted that, “port activity, deposit money in banks, credit to the private sector and SSNIT contributions are beginning to record some modest gains – a sign of some early green shoots.”
The economic activity contraction is likely to result in Ghana recording a negative GDP growth for the second quarter of this year.
This would be the first time Ghana has reported negative quarterly growth since it started liberalizing its economy through an International Monetary Fund and World Bank supervised Economic Recovery Programme in the mid-1980s.
Despite this short-term phenomenon there is still a possibility that Ghana can achieve marginal economic growth this year.
Ghana’s Finance Minister Ken Ofori-Atta forecasted that growth will fall to just 0.9 percent this year, in his recent mid-year budget review presentation to Parliament.
The severity of the contraction in economic activity in April and May, may be a compelling reason why government is easing its erstwhile social and economic restrictions at a pace that many medical experts regards as too hurried, despite its being done in phases.
It is however, hoped that the phased resumption of full economic and social activities, supported by government’s ongoing economic stimulus programmes will propel economic growth over the second half of the year.