Ghana’s economy is under significant strain despite measures from the IMF. Finance Minister Dr. Cassiel Ato Forson highlights that while there have been sacrifices from various stakeholders, critical economic targets are not being met, with rising inflation and a widening primary balance deficit. Structural reforms remain behind schedule, emphasizing a challenging path ahead for economic stabilization.
Ghana’s economy continues to face substantial challenges, even amidst the ongoing support from the International Monetary Fund (IMF). During a recent presentation of the 2025 Budget Statement, Finance Minister Dr. Cassiel Ato Forson stated that significant sacrifices from domestic bondholders, external creditors, and taxpayers were necessary to achieve any degree of progress under the IMF-supported programme, yet the economy remains distressed.
Dr. Forson expressed concerns regarding the country’s ability to meet key targets outlined in the IMF programme, particularly in areas of inflation control, social protection spending, and primary balance commitments, as the IMF is scheduled for its fourth review in April 2025. Of particular note, critical structural reforms that were to be completed by the end of 2024 are now behind schedule.
The inflation rate has risen to 23.8% in 2024, up from 23.2% in 2023, significantly surpassing the government’s own target of 15% and the IMF’s expectation of 18%. This continued inflationary pressure is adversely affecting household budgets and businesses, prompting discussions with the IMF under the Monetary Policy Consultation Clause to address these challenges.
Furthermore, the primary balance deficit expanded from 0.2% of GDP in 2023 to 3.9% of GDP in 2024, diverging sharply from the targeted surplus of 0.5% of GDP. Dr. Forson cited a 4.4-percentage-point shortfall experienced during the previous administration as a contributing factor to this decline. Despite these economic hurdles, the Finance Minister assured the public of the government’s commitment to restoring economic stability, albeit requiring further sacrifices and difficult policy decisions.
In summary, Ghana’s economic situation remains precarious despite progress achieved through the IMF-supported programme. Key indicators, including inflation and primary balance, have worsened beyond government targets, leading to concerns about the country’s economic trajectory. The Finance Minister has stressed the need for ongoing sacrifices and prudent decision-making to navigate these challenges effectively. The commitment to structural reforms and fiscal discipline will be critical in the coming months.
Original Source: www.gbcghanaonline.com
