Deloitte claims Ghana’s 4% GDP growth in 2024 is reasonable but contingent on fiscal measures. The analysis indicates that cuts in government spending may hinder economic growth and exacerbate unemployment. It emphasizes addressing energy sector debts to ensure stable growth. The anticipated deficit for 2025 reflects a prudent governmental strategy amid fiscal challenges.
Deloitte has stated that Ghana’s projected real Gross Domestic Product (GDP) growth of 4.0% for 2024 is both reasonable and attainable. This assessment follows the analysis of the 2024 Budget, which highlights a decline in real GDP growth largely due to the government’s fiscal tightening and aggressive expenditure reductions. Such measures may impede the government’s capacity to implement critical policies, potentially slowing economic growth in the near term, with further projected declines by 2025.
Moving forward, Deloitte emphasizes the necessity for the Ghanaian government to address the high budget deficits, averaging around 7.5% from 2021 to 2024, alongside primary balance deficits. These financial strains could exacerbate budget arrears and the national debt, particularly in a constrained fiscal environment following unsustainable debt levels. The anticipated deficit of 3.1% for GDP in 2025 indicates a prudent governmental approach while engaging with the International Monetary Fund (IMF) Economic Credit Facility programme.
Despite the outlined fiscal restrictions, Deloitte underscores the pressing need for the government to foster economic growth due to rising unemployment rates. It commends the government’s plan to focus on select sectors that promise economic expansion and job creation, though it cautions that balancing these objectives with macroeconomic stability will be challenging. A careful approach to expectations around job creation is prudent given the moderate growth outlook for 2025.
The firm also identifies the growing debts and arrears within the energy sector as a significant risk to proposed economic growth. This is especially pertinent since industrial growth—which is anticipated to drive the economy—relies heavily on a stable energy supply. Deloitte recommends that the government engage with key stakeholders to formulate a strategic plan for settling energy debts promptly, ensuring a sustainable power supply that supports economic development.
In conclusion, Deloitte asserts that Ghana’s target of a 4.0% GDP growth in 2024 is achievable, providing appropriate fiscal adjustments are made. While the government must navigate tight budgets and a challenging economic landscape, prioritizing investment in critical sectors and addressing energy sector debts will be crucial for fostering growth and reducing unemployment.
Original Source: www.myjoyonline.com
