In part 1 of this series, we highlighted how the Covid-19 outbreak could yield a reduction in voter turnout come December. In this piece, we analyse the effect of the outbreak through the lens of the economic impact it will have.
At a glance:
- All around the world the Covid-19 outbreak is exercising massive recessionary pressures on economies big and small.
- In Ghana, the government has already cut our GDP growth forecast to about 2.6% well below the target of 6.8%.
- What this means is that our economy is going to grow at a much slower pace than what we had originally planned for.
- Additionally, there are projected shortfalls well into the billions of Cedis in revenues that government typically expects to receive for the conduct of its business.
- At a more micro level, we are starting to see an uptick in unemployment, shortfalls in household incomes and a possible increase in the prices of everyday goods and services.
- So what will it mean for the December elections?
- When it comes to what issues are top of voters’ minds in an election year, the economy typically tops the list.
- Perceptions of current economic conditions as well as expectations of future conditions shape how most voters will choose to price the economy into their calculus of who to vote for.
- That said, if economic conditions begin to show signs of recovery by December and voters expect continued positive growth in future conditions, then the NPP stands to benefit as the incumbent party.
- However, if conditions by December are a lot worse than what we see now or if voters expect economic conditions to worsen beyond December then the NDC could benefit. The extent to which they will benefit could be augmented or diminished by other non-economic fundamentals that also shape the outcome of the elections.
- Our Composite Economics Index Model generates its elections forecast looking at this specific issue of voter perception of economic conditions now as well as their future expectations of where the economy will be. Over the next few months we will be honing in a bit more on how voter sensitivity to economic pressures shape their choices for who to support.