Economic growth slowed in the third quarter of 2012 as the services sector, which provides the largest chunk of output, shrunk for the first time in five quarters, by 2.2 percent.

The Ghana Statistical Service (GSS) said on Wednesday that growth was 1.7 percent in the third quarter year-on-year, down from 3.2 percent and 15.7 percent in the second and first quarters respectively.

It said the agricultural sector recovered from a slump of 0.1 percent in the previous quarter with an expansion of 4.6 percent in the third quarter, while industry surged by 3.6 percent, driven by construction and mining activities.

Growth in agriculture was boosted by crop production, which increased by 9.4 percent, but livestock, forestry and fishing declined by 20.5 percent, 7.5 percent and 24.2 percent respectively.

In the services sector, transport and storage as well as communication activities contracted, leading to the negative growth recorded, but financial services, hotels and real estate business grew substantially. Despite the slowdown in the third quarter, the pick-up in oil production together with the rise in spending during the holiday season are factors that may have boosted GDP in the last quarter of the year, figures for which will be published at a future date.

In September 2012, the GSS projected annual growth of 7.1 percent for the economy, half the pace in 2011 when oil production raised GDP growth to double digits for the first time in more than two decades.

President John Mahama, who was sworn in on Monday to begin a full presidential term, has said his policies will grow the economy by 8 percent or more per annum, and raise the per capita income – currently in the region of US$1,500 – to US$2,300 by 2016.

He has also promised to accelerate job-creation using investments in industries such as petrochemicals and fertiliser-manufacturing, which will be powered by natural gas expected to be supplied from Ghana’s oil fields.

With oil production forecast to hit 120,000 barrels per day in 2013, government revenues from the sector could ramp up to at least US$1 billion and stimulate additional infrastructure investments in critical sectors such as energy and roads.

Dr. Kwabena Duffuor, now the interim Finance Minister, told B&FT in October he expected the economy to expand by between 8 and 9 percent this year as oil production climbs and investments rise due to the stable macro-economy.