Ghana’s economic growth is expected to inch past 1.5 per cent by the close of 2023, the International Monetary Fund (IMF) has said.
The Fund further projects that the country’s Gross Domestic Product (GDP) growth rate will accelerate to 2.7 per cent in 2024, marking a positive outlook for the West African country.
“At the current juncture and based on the findings of the first Extended Credit Facility (ECF) review mission that just ended last week, IMF staff assessment is that the growth projection for 2023 will be revised up from the 1.5 previously assumed.”
The statement above was made by an IMF Spokesperson in a mail correspondence with the Ghana News Agency, after a revision of Ghana’s economic growth to 1.2 per cent in the latest World Economic Outlook.
The latest IMF World Economic Outlook was released on Tuesday, 10 October, at Marrakech, Morocco, as part of events for the ongoing IMF/World Bank Group (WBG) Annual Meetings.
According to the Fund, the 1.2 per cent was based on old data of the Fund staff projections, which did not take into consideration, the positive performance of the world’s largest gold producer for the first two quarters of 2023.
“In particular, it [the 1.2 per cent growth projection] does not take into account the recent data releases that showed a higher growth rate than expected at the beginning of the programme (averaging 3.2 per cent for the first two quarters),” the Spokesperson said.
“The economy entered 2023 with a significant growth momentum and the economy has been more resilient than expected,” the IMF Spokesperson noted in the mail correspondence.
However, to sustain or boost the growth going forward, the IMF recommended that Ghana sustain efforts to restore macroeconomic stability and create an environment, more conducive to private sector investment.
The World Bank is projecting a 1.5 per cent and 2.8 per cent growth for Ghana in 2023 and 2024, respectively, while Fitch Solutions, a global rating firm, expects a 3.0 per cent and 3.7 per cent growth in 2023 and 2024, respectively.
The rating firm attributed the positive development in the Ghanaian economy to monetary tightening and favourable exchange rate dynamics as consumer activities strengthened.
Last Friday, Ghana reached a Staff-Level Agreement with the IMF on economic policies and reforms after the first review of the three-year US$3 billion ECF-supported programme.
The successful review was to pave the way for the release of about US$600 million in financing once approved by the IMF Executive Board.
Mr Stephane Roudet, IMF Mission Chief for Ghana, who spoke at a press briefing in Accra, noted that the country’s fiscal performance with respect to the objectives of the IMF-loan support programme had been strong.
He also indicated that Ghana’s macroeconomic policies had been adjusted by authorities, domestic debt restructuring completed, and wide-ranging reforms had been launched amid acute economic and financial crisis.
Mr Ken Ofori-Atta, Minister of Finance, explained that the implementation of the US$3bn IMF-supported Post-COVID-19 Programme of Economic Growth (PC-PEG) had led to strong signs of macroeconomic recovery and stability.
The GDP growth averaged 3.2 per cent for the first two quarters of 2023, a 0.2 percentage point higher than the same period in 2022, headline inflation dropped to 40.1 per cent from 43.1 per cent in July and 42.5 per cent in June, while the Cedi depreciated on year-to-date cumulatively by 23.5 per cent compared to the same period in 2022.
“Notwithstanding uncertainties around global economic recovery, we are confident that we are on the right path and, therefore, optimistic about the future,” Mr Ofori-Atta said.