Ghana’s Finance Minister reports ongoing economic distress despite IMF support, with unmet targets and worsening inflation. Key metrics, including the primary balance and inflation rate, show significant deterioration. The government remains committed to stabilization but acknowledges the need for further sacrifices and tough decisions from all involved.
Ghana’s economy is experiencing significant challenges, despite advancements made during the IMF-backed initiative, according to Finance Minister Dr. Cassiel Ato Forson. He emphasized that the economic recovery has come with considerable sacrifices from domestic bondholders, external creditors, and taxpayers, highlighting the persistent distress the economy faces.
In his presentation of the 2025 Budget Statement before Parliament, Dr. Forson raised alarms about the difficulty in meeting critical targets set by the IMF. He specifically noted concerns regarding inflation control, social protection spending, and the primary balance by the scheduled fourth review in April 2025. Furthermore, essential structural reforms that were meant to conclude by the end of 2024 are significantly delayed.
The inflation rate has escalated, moving from 23.2% in 2023 to 23.8% in 2024, failing to achieve the government’s budget goal of 15% and the IMF’s target of 18%. This rise in inflation has raised concerns with the IMF due to its impact on household expenditures and business operations.
Additionally, the primary balance—measured on a commitment basis—deteriorated, with a deficit growing from 0.2% of GDP in 2023 to 3.9% of GDP in 2024, diverging significantly from the planned surplus of 0.5%. Dr. Forson attributed this slippage to issues stemming from the previous administration.
Despite the challenges, Dr. Ato Forson assured the public of the government’s dedication to economic stabilization. Nonetheless, he recognized that achieving this goal will necessitate further sacrifices and challenging decision-making in the future.
In summary, Ghana’s economy remains under stress, facing inflationary pressures and significant fiscal deficits. The Finance Minister expressed concerns over the inability to meet key IMF targets and highlighted that sacrifices from various stakeholders were pivotal to the current situation. While the government is committed to economic stabilization, forthcoming actions will require continued hardship and decisive measures from all parties involved.
Original Source: www.gbcghanaonline.com
