Deloitte has projected a 4.0% GDP growth rate for Ghana in 2024, citing government fiscal tightening as a factor for a decline in growth. The firm highlights the need for the government to reduce budget deficits while urging investments to address unemployment and energy sector debts as crucial steps for economic stability and growth.
Deloitte has projected a reasonable and achievable GDP growth rate of 4.0% for Ghana in 2024. This forecast acknowledges a decline in real GDP growth due to anticipated fiscal tightening measures and expenditure cuts by the government, which may impede key policies and programs that drive economic momentum. The firm cautions that these actions will likely contribute to a slowdown in growth, particularly with expectations for a decline in GDP growth by 2025.
To counteract increasing budget deficits, which have averaged about 7.5% between 2021 and 2024, Deloitte emphasizes the importance of government measures to stabilize finances and reduce primary balance deficits. A projected budget deficit of 3.1% of GDP for 2025 reflects a prudent approach as the government engages with the International Monetary Fund’s Economic Credit Facility program. Additionally, supportive fiscal restraint is seen as a means to restore investor confidence and enhance macroeconomic stability.
The firm also identifies the pressing need for economic expansion to mitigate rising unemployment levels. Despite forthcoming cuts in government spending, facilitating growth remains critical. Deloitte advocates for targeted investments in sectors that can stimulate job creation, while acknowledging the inherent difficulties in achieving this balance. Expectations for job creation in 2025 should remain tempered as the government prioritizes macroeconomic stability for sustainable long-term growth.
Deloitte has recognized the mounting debts in Ghana’s energy sector as a significant threat to projected economic growth. Since growth is largely contingent upon industrial expansion driven by the energy sector, the firm recommends that the government act swiftly to formulate a repayment strategy with key stakeholders to ensure a steady power supply, which is essential for economic expansion.
Consequently, the fiscal outlook presented by Deloitte highlights critical areas of concern and recommendations for the Ghanaian government to address, ensuring both economic stability and sustainable growth moving forward.
In conclusion, Deloitte’s analysis underscores the cautious optimism surrounding Ghana’s projected GDP growth of 4.0% for 2024, pressuring the government to address fiscal deficits and stabilize the economy. The critical necessity for targeted sector investments to enhance job creation and manage pressing energy sector debts is evident. Future economic strategy must balance fiscal prudence with growth facilitation to ensure resilience and sustainability amidst the challenging macroeconomic landscape.
Original Source: www.myjoyonline.com
