However, due to the prudent fiscal and macroeconomic management strategies put in place by Government as part of the Better Ghana Agenda, the economy quickly recovered, and it is currently enjoying a great deal of macroeconomic stability accompanied by accelerated economic growth. Real GDP growth rate increased from 4. This is much better than the year-on-year growth rate of 6.
The impressive year-on-year real GDP growth in the first quarter of was driven by crops mainly cocoa , mining and quarrying, manufacturing, construction, transport and storage and business service activities. These data clearly show that Ghana is well on course to realize the projected real GDP growth rate of From June when it reached a peak of Even though inflation rate increased marginally to 9.
After depreciating against the US dollar at the rate of For instance, from January to October , the interbank exchange of the cedi to the US dollar stabilized around 1. Even though starting from November the cedi began to depreciate against the US dollar, which culminated in a 5 percent depreciation rate in January , the exchange rate of the cedi has stabilized since then.
The external sector of the economy has seen a lot of improvement since The first seven months of has again seen a good performance of the external sector as merchandise exports grew by This compares with merchandise imports growth of The expansionary fiscal stance of the previous administration leading to the huge budget and current account deficits was brought to an end in Using the ARDL and Granger causality test paradigm, they investigated the link between fiscal deficit, money supply, and inflation in Fiji using annual data from to Appelt, The research findings demonstrated that between and , the pre-crisis period, there was a very substantial negative link between economic progress and unemployment.
They also used the Johansen Co-integration Test and Granger Causality Tests to check for cointegration in the long-term and short-term and test for causality between unemployment, inflation, and economics.
On the other hand, the findings revealed that there is a short-term and long-term relationship between unemployment, inflation, and economic progress. The authors discovered that the deficit and tax income are negatively associated with development, whereas total expenditure is positive, using cross-sectional linear regression.
The research above focuses on theoretical and empirical perspectives on economic growth, inflation, interest rates, and fiscal policy in various nations, including Ghana.
Table 1 : The T statistics is greater than the critical values except AGR which is less than the critical values so we accept the null hypothesis. There is therefore a significant contribution of Agriculture to the overall growth of GDP.
There is therefore a significant contribution of Agricultural Sector to the overall growth. Table 1. Contribution of agricultural sector to GDP. From the data provided from to there was continuous growth of the agriculture sector from The T statistics of 9. From the data provided from to there was continuous growth of the service. The growth was between Table 2. Contribution of industrial sector to GDP.
The growth was from The T statistics of the three sectors 6. There is therefore a significant contribution of all the three Sectors of the Ghanaian economy to the overall growth of GDP from to However, from to the results showed a steady growth of the economy and then from to there was a slight decrease this was as a result of the outbreak of coronavirus pandemic which badly affected the economy of the world. The following gives a brief description of the various curves in Figure 1 blue represents Agriculture, red represents Industry, Green represents Service and black represents overall GDP growth.
Each curve represents the overall performance from to as compared to the overall GDP growth. The Y-axis shows the percentages of contribution to GDP for the various sectors of the Ghanaian economy.
Table 3. Contribution of service sector to GDP. Table 4. Figure 1. Graphical presentation of the growth of the three sectors for the overall growth of GDP.
In addition, the government should focus on boosting the agriculture and industrial sectors, as their contributions to GDP decreased in Furthermore, the government should enact policies that would lower the prices of goods both food and non-food commodities. Finally, the interest rate should be kept low enough to allow individuals and investors to borrow and invest while also allowing the economy to expand through industrialization, which will improve the trade balance and economic growth by increasing aggregate demand or income.
The data used in this study ranges from to , and it was challenging to obtain more recent data. As a result, future research can explore more recent data. I also thank my dear wife Nancy Owusu-Sekyere and children Stephanie and Bennette Owusu-Sekyere for their continuous support and prayers. The authors declare no conflicts of interest regarding the publication of this paper. African Development Bank. The Ghanaian Economy: An Overview. Ghanaian Journal of Economics, 1, Journal of Economic Literature, 12, An Assessment of Fiscal Sustainability in Ghana.
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Econometrica, 14, International Financial Crises. A Monetary History of the United States, The Princeton University Press. Bingham Journal of Economics and Allied Studies, 11, An Essay in Dynamic Theory. The Economic Journal, 49, Historical Origins of the Cost-Push Fallacy. International Monetary Fund. Doctoral Dissertation. The Essential Keynes. Penguin Classics. Public Choice, 64, Theories of Surplus-Value.
Amherst, Prometheus Books. Mercantilism and Modern Growth. Journal of Economic Growth, 4, Addison Wesley Longman. Economic Development and Cultural Change, 43, International Journal of Business and Social Science, 4, Theory of Interest Rate.
Review of Theories and Models of Economic Growth. Comparative Economic Research, 17, Basic Blackwell Ltd. Oxford University Press. Technical Change and the Aggregate Production Function. The Review of Economics and Statistics, 39, Inflationary Trends and Control in Ghana. Macroeconomic Theories of Inflation. The Economic Journal, , The World Bank in Ghana. Home Journals Article. DOI: Abstract The Ghanaian economy has been growing for the past three decades, but growth, redistribution, and sustainability have all faced obstacles.
Share and Cite:. Adu, B. American Journal of Industrial and Business Management , 11 , Literature Review This section discusses a variety of economic growth, inflation, interest rate, and fiscal policy theories. Economic Development 3. Early Economic Growth Theories Representatives of mercantilism are the originators of growth theories 15thth centuries.
Economic Growth as a Classical Theory According to Adam Smith, theory on the wealth of nations, a pioneer of classical economics, is built on trade rather than gold Smith, Economic Growth According to Keynesian Theory The establishment and critical processing of Keynesian macroeconomic equilibrium, based on economic variables such as national income, consumption, savings, and investments, is at the heart of Keynesian growth theories Keynes, The Growth Theory of the Neoclassical Era The Neoclassical Growth Theory is an economic growth model that explains how three economic factors, labor, capital, and technology, interact to produce a stable pace of economic growth.
Inflation 4. Inflation and the Monetarism Theory The monetary theory of inflation is based on the amount of money in circulation at any one time. Inflationary Demand-Pull Theory The demand-pull theory states that demand-pull inflation is caused by an increase in aggregate demand Keynes, Inflationary Cost-Push Theory The total volume of products and services produced by an economy at a given price level is called aggregate supply.
Interest Rate 5. The Traditional Interest Rate Theory The classical theory of interest, the standard explanation of interest in western economics, emphasizes that investments and savings influence interest rates.
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