Ghana’s economy is still in distress despite IMF support, with rising inflation and a widening primary balance. The Finance Minister, Dr. Cassiel Ato Forson, stated that key IMF targets are unlikely to be met, and further sacrifices are anticipated as the government seeks stabilization.
Despite the ongoing support from the International Monetary Fund (IMF), Ghana’s economy continues to face severe challenges. According to Finance Minister Dr. Cassiel Ato Forson, significant progress has been made, yet the sacrifices made by domestic bondholders, external creditors, and taxpayers have not alleviated the economic distress.
During his presentation of the 2025 Budget Statement to Parliament, Dr. Forson noted that the recovery has come at a considerable cost. He expressed concern that critical targets under the IMF program, including inflation management and social protection spending, are unlikely to be achieved by the time the IMF conducts its fourth review in April 2025.
The Finance Minister highlighted that inflation increased from 23.2% in 2023 to 23.8% in 2024, surpassing the government’s own budget target of 15% and the IMF’s target of 18%. The spike in inflation has intensified discussions with the IMF regarding its Monetary Policy Consultation Clause, as it significantly impacts the cost of living for households and businesses.
Additionally, the primary balance, measured on a commitment basis, has deteriorated, with a deficit widening from 0.2% of GDP in 2023 to 3.9% in 2024, opposing the targeted surplus of 0.5% of GDP. This setback has been attributed to a slippage of 4.4 percentage points incurred by the previous administration.
In light of these ongoing issues, Hon. Dr. Cassiel Ato Forson reassured the public of the government’s dedication to stabilizing the economy. However, he recognized that achieving this goal will demand further sacrifices and difficult decision-making in the future.
In summary, Ghana’s economy, despite support from the IMF, continues to struggle due to rising inflation and a deteriorating primary balance. Key targets under the IMF program may not be met, and significant sacrifices have been demanded from citizens. The government remains committed to stabilization but acknowledges the challenging path ahead.
Original Source: www.gbcghanaonline.com
