Economists Urge Sustained Efforts to Solidify Ghana's Economic Stability in 2023
A group of economists is urging the government to intensify its efforts in bolstering the nascent economic stability observed in the initial half of 2023, aiming to provide relief to the citizens of Ghana.
Analyzing the mid-year budget review, the economists emphasized that while there were indications of the Ghanaian economy stabilizing in the first six months, it was premature to declare that a definitive turnaround had been achieved.
"We've taken the first step, but there's still much ground to cover," remarked Professor Peter Quartey, Director of the Institute of Statistical, Social and Economic Research (ISSER), during an assessment forum on the mid-year budget review in Accra.
Prof. Quartey emphasized that the existing metrics involving inflation, exchange rates, and budget deficits didn't warrant celebrating an all-is-well sentiment within the economy and among citizens.
"Inflation has tapered from 53.6 percent in January to 42.5 percent by June 2023, and there's been a degree of stability in exchange rates. While certain revenue streams have improved during H1 2023, a considerable number of them have fallen short of their six-month targets. Additionally, the potential for exchange rate depreciation looms, given the government's impending external loan payments," observed Prof. Quartey.
Dr. Patrick Asuming, Senior Lecturer at the University of Ghana Business School (UGBS), echoed these sentiments, noting that some of the earlier progress made in the year was showing signs of reversal.
"The current trends suggest that the government hasn't completely reversed the situation. When you speak of turning the corner, you shouldn't simultaneously announce a downward revision of growth projections," emphasized Dr. Asuming.
He elaborated that despite some disinflation during the first quarter of 2023, the country's inflation rate had plateaued and was lately demonstrating slight upward movement.
"Although GDP growth in Q1 was noteworthy, it was predominantly due to governmental activities rather than sustainable growth in the private sector. Therefore, it's premature to claim that we've fully turned the corner," Dr. Asuming highlighted.
Discussing the role of the International Monetary Fund (IMF) bailout program, Dr. Asuming predicted that it would help in maintaining some stability in the local currency's exchange rate against major trading partners, but cautioned that overall economic growth would be slow.
"We cannot afford to regress on our short-term commitments outlined with the IMF. The government must execute enduring strategies and revitalize flagship initiatives, such as the Planting for Food and Jobs (PFJ) program," urged Dr. Asuming.
During the presentation of the 2023 mid-year budget to Parliament, Finance Minister Mr. Ken Ofori-Atta asserted that, despite challenges, "we have turned the corner."
He attributed this turnaround to collective investments made during the challenging period since March 2020, including the IMF's assistance to execute the government's Post-COVID-19 Programme for Economic Growth (PC-PEG).
Mr. Ofori-Atta stressed the importance of a united focus on productivity and growth, committing the government to preserving a favorable macroeconomic environment for the overall welfare of the nation.