Ghana set to become fastest growing economy in 2011 – World Bank

The World Bank has projected that Ghana would be the fastest growing economy in Sub-Saharan Africa, with growth rate of 13.4 per cent in 2011, dropping to 10 per cent in 2012.

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Launching the Bank’s global economic prospects report via a video-conference on Thursday, Mr Andrew Burns, Manager of Global Macroeconomics in the World Bank’s Prospects Group, said Ghana was still in position to register strong economic growth without the oil sector, particularly in construction services as large infrastructure projects were being undertaken.

He said, Ghana’s economy benefited from strong rebound of both volumes and prices of gold and cocoa, increase in tourism, and higher household and government spending last year, with growth rate estimated at 6.6 per cent in 2010.

However, Mr Burns cautioned that if the inflows from the oil sector in Ghana were not managed prudently, it could distort the incentive structure for agricultural exports.

He said developing countries had recovered so fast from the global economic downturn and were now pulling along the high income countries, which was unusual.

The report noted that Africa appeared to have sustained growth and transformation in 2010 and the private sector was increasingly attracting investment into their economies, adding “Africa appears to be poised for sustained growth due to private capital flows.”

The World Bank said most developing countries had in addition, recovered from the world food crisis and had projected a steady global growth for developing countries.

“The world economy is moving from a post-crisis bounce-back phase of the recovery to a slower but solid growth in 2011 and next with developing countries contributing almost half of the global growth,” it said.

It estimated that global GDP, which had expanded by 3.9 per cent in 2010, would slow to 3.3 per cent in 2011, before climbing back to 3.6 per cent in 2012.

The Bank noted that developing countries were expected to grow about seven per cent in 2010, six per cent in 2011, and 6.1 per cent in 2012.

It said the growth rate in developing countries would continue to outstrip growth in high-income countries which were projected to grow at 2.8 per cent in 2010, 2.4 per cent in 2011 and 2.7 per cent in 2012.

The Bank said strong developing-country domestic demand growth was leading the world economy, yet persistent financial problems in some high-income countries were still a threat to economic growth and required urgent policy actions.

Low income countries were projected to be strengthened more with a growth rate of 6.5 per cent in both 2011 and 2012, since their countries saw trade gains in 2010, and overall, their GDP rose by 5.3 per cent in 2010.

According to Mr Burns, the global food prices were having a mixed impact.

He said in many economies, dollar depreciation, improved local conditions, and rising prices for goods and services indicated that the real price of food had not risen as much as the dollar price of internationally traded food commodities.