A new report by the International Monetary Fund (IMF) is projecting that the economy will not witness much growth this year as forecasted by government.
The World Economic Outlook report released by the IMF in Washington DC indicates that Ghana will record a growth rate of 4.5 percent, lower than the 5.4 percent that the Finance Minister, Seth Terkper has projected for 2016.
The IMF report also gives a preview of the performance of over 100 member countries of the Fund in terms of inflation and economic growth among others.
According to persons close to the IMF, the 4.2 percent growth rate projection is informed by the expected negative impact of the declining commodity prices on government’s projected revenue for this year.
Ghana’s economic situation has also been compounded by the current energy crisis which appears not to be ending anytime soon and thereby expected to affect economic activities.
For some economists, the reduction of Ghana’s growth projection by the IMF is an indication that the current challenges facing the economy are not over.
However for others, a 4.5 percent growth rate for a developing economy like Ghana might not be that bad given that the country grew by about 3.5 percent last year.
The projection by IMF is expected to guide investors who are still contemplating whether to move their funds to Ghana.
The IMF report is also forecasting an increase in Ghana’s inflation to 12.4 percent, as against government’s target of 10 percent.
The IMF also warned oil exporting countries like Ghana not to see the recent pickup in crude oil prices as an indication of the end of the crises that hit the commodity.
Crude oil prices on the international market dropped by more than 70 percent over the past one year and currently trading at around $44 a barrel. This reduced Ghana’s revenue from crude export by more than 60 percent to $374million.
This compelled the Finance Minister, Seth Terpker to announce plans to review estimates in the 2016 budget by July.
But speaking at a press conference in Washington DC, Economic Counsellor of the IMF, Maurice Obstfeld, said it might be prudent for oil exporting countries like Ghana may need tread cautiously.
From Felix Dela Klutse, Washington DC, USA
Courtesy: IREX
