Ghana’s economy continues to struggle despite IMF support, as noted by Finance Minister Dr. Cassiel Ato Forson. Key targets, including inflation control and primary balance, are unlikely to be met. Inflation increased to 23.8%, worsening the cost of living, while the primary balance deficit significantly grew. The government remains committed to economic stabilization, necessitating further sacrifices.
Ghana’s economy is currently facing significant challenges despite advancements made through the IMF-supported program, as stated by Finance Minister Dr. Cassiel Ato Forson. During the presentation of the 2025 Budget Statement to Parliament, he emphasized that while there have been gains, they have come at great cost to domestic bondholders, external creditors, and taxpayers who have made substantial sacrifices.
The Finance Minister expressed his concern that critical targets set under the IMF program, including inflation management, social protection expenditure, and the primary balance on a commitment basis, are unlikely to be achieved in the impending IMF review scheduled for April 2025. Moreover, many structural reforms initially expected to be completed by the end of 2024 are now significantly delayed.
Inflation has seen an increase from 23.2% in 2023 to 23.8% in 2024, exceeding both the government’s target of 15% and the IMF’s target of 18%. This rising inflation has raised discussions with the IMF under the Monetary Policy Consultation Clause, as increased costs of living place additional burdens on households and businesses.
Additionally, the primary balance has worsened markedly, with the deficit expanding from 0.2% of GDP in 2023 to 3.9% of GDP in 2024—far from the intended surplus of 0.5% of GDP. Dr. Forson attributed this decline to a 4.4-percentage-point slippage occurring under the previous administration.
In spite of these difficulties, Hon. Dr. Cassiel Ato Forson reiterated the government’s commitment to stabilizing the economy, although he recognized that overcoming the existing challenges will necessitate further sacrifices and difficult decisions ahead.
In summary, Ghana’s Finance Minister has highlighted the ongoing economic struggles faced by the country, despite the support from the IMF. With key targets in inflation control and fiscal balance not being met, coupled with delays in structural reforms, the government is grappling with significant economic distress. The Finance Minister has assured that stabilizing the economy remains a priority, albeit requiring continued sacrifices from stakeholders.
Original Source: www.gbcghanaonline.com
