Industry Trend Analysis - Structural Economic Weaknesses Will Cap Vehicle Sales Growth - JUNE 2017
BMI View: S tructural weaknesses in Ghana ' s economy will limit the growth opportunity for vehicle sales over our forecast period to 2021 . The relief for consumers expected from the slowing inflation and lower interest rates will be overshadowed by the country ' s low consumer purchasing power and the weak road infrastructure.
The easing of economic headwinds in Ghana will not be sufficient to generate greater growth in vehicle sales over our 2017-2021 forecast period because deeper structural inefficiencies will remain a greater pressure on growth. Passenger vehicle (PV) sales will remain subdued because of the deteriorating road infrastructure and the depreciating currency will counteract the lowering inflation and interest rates by increasing prices ( see ' High Import And Living Costs To Drag On Car Sales ' , January 11).
We forecast PV sales to contract by 2.3% in 2017 and to average only 1.5% growth over our forecast period as sustained pressure prevents greater growth ( see chart below). The commercial vehicle (CV) sales outlook is somewhat more positive than that of PVs over our forecast period because of larger infrastructure investment. We forecast CV sales to grow by 2.2% in 2017 and to average growth of 2.04% over our 2017-2021 forecast period ( see chart below).
|Sustained Pressure Will Limit Growth Recovery|
|Ghana - PV & CV sales|
|e/f = BMI estimate/forecast. Source: BMI, Ghana NRSC|