Ghana's economic growth slowed to two percent year-on-year in the third quarter, down from 2.7 percent the previous year, reflecting the impact of fiscal tightening and high interest rates aimed at curbing inflation.

Despite the deceleration, analysts anticipate that the economy is still poised to achieve the government's revised full-year growth target of 2.3 percent for 2023.

Apakan Securities noted that while challenges persist, the annual expansion is expected to slightly surpass the upwardly revised goal.

The central bank's economic activity index indicates a steady recovery, raising expectations of faster growth in the fourth quarter.

The third-quarter figure of 2 percent brings the year-to-date average expansion to 2.8 percent, slightly below the 2023 target.

Ghana's provisional non-oil real GDP eased to 2.7 percent year-on-year in Q3 2023, compared to 3.3 percent in Q3 2022.

The real quarterly GDP, including the oil and gas sector, reached GH¢44.74 billion in Q3 2023. Non-oil real GDP rose to approximately GH¢41.91 billion.

Agriculture exhibited robust 5.9 percent growth, while the services sector expanded by 5.5 percent.

The industry sector contracted by 4.3 percent, with construction experiencing an 8.3 percent decline.

Services remained resilient, with broad-based 5.5 percent growth led by professional services, transport, real estate, and healthcare.

Agriculture, growing at a solid 5.9 percent, offset a surprise contraction in cocoa output and challenges in forestry. The industry sector, facing its fourth consecutive contraction, dropped 4.3 percent on the quarter.

Construction saw a sharp 8.3 percent decline, and mining and electricity also contributed to the overall contraction.

The weak industrial performance reflects the impact of inflation-fighting measures, including spending cuts and a 10-percentage-point interest rate hike since early 2022.

The authorities are committed to tightening policies to bring inflation back within the official target band after reaching a 21-year peak in October.