The Impact of Macroeconomic Variables on Stock Market Performance in Ghana

Miss Rashidatu Abdullai; Oscar Twumasi; Amos Nana Addo; Daniel Danso Tettey

doi:10.55529/jpome.36.1.14

Authors

Miss Rashidatu Abdullai School of Business, University of Cape Coast, Ghana.
Oscar Twumasi Department of Agricultural Economics, Agribusiness & Extension, Kwame Nkrumah University of Science and Technology, Ghana.
Amos Nana Addo School of Business, University of Cape Coast, Ghana.
Daniel Danso Tettey School of Business, University of Cape Coast, Ghana.

Keywords:

Macroeconomic Variables, Stock Market, Inflation, Exchange Rate, Interest Rate.

Abstract

The study used monthly data from 2010 to 2021 to consider the impact of macroeconomic variables on stock market performance in Ghana. Inflation rates, interest rates, exchange rates, and global economic policy uncertainty were the macroeconomic variables studied. Because the study was based on numerical secondary data, the study used a quantitative research approach. The study employed a correlation test to determine the relationship between variables. Only two of the four macroeconomic variables studied (interest rates and global economic policy uncertainty) had an impact on Ghanaian stock performance, according to the study. The study revealed that Ghana's stock market performance is unaffected by inflation or the exchange rate. Global Economic Policy Uncertainty, Interest Rate, and Inflation had a negative relationship with stock returns and were not statistically significant, however, Exchange Rate was statistically significant and positively correlated with stock returns. The study recommends maintenance and implementation of conservative macroeconomic policies, as changes in macroeconomic variables have an impact on stock returns, to strengthen support from stock actions.