IMF cuts Ghana’s projected growth to 7% for 2013 as economy faces risks

The International Monetary Fund (IMF) today September 18, 2013 said it expects Ghana’s full-year growth to be around 7% for 2013.

The Washington-based Fund cited imbalances in the Ghanaian economy as it is exposed to short-term risks, after a week assessment by its team in Accra led by Ms Christina Daseking.

Ghana has targeted a gross domestic product (GDP) growth of 8 % by the end of 2013 on robust economy, according to the 2013 Budget read by Finance Minister Seth Terpker on March 5.

But the IMF noted that economic growth in Ghana weakened in the first half of 2013, reflecting energy disruptions and high real interest rates.

“As energy problems have now subsided, the mission expects full-year growth of about 7%, compared with 8% in 2012,” it said in a statement.

The IMF added “the main risks to the economy arise from a large current account deficit—projected to increase to above 13% of GDP in response to much weaker gold and cocoa prices and ongoing fiscal pressures.”

Ghana’s fiscal deficit reached 12.1% of GDP end of 2012 after overshooting the 6.7% target almost a 100%.

With projected reserves of less than 3 months of imports, the Fund stated that the economy is exposed to risks from a potentially deteriorating external environment and global financial market pressures.

According to the IMF’s statement, the country’s inflation has risen temporarily above 11%, as a result of the significant fuel price adjustments earlier in the year.

In April 2012, the IMF expected the Ghanaian economy to grow 7.4% in 2013, according to its World Economic Outlook (WEO).
Meanwhile the Fund believes that Ghana’s medium-term economic prospects remain strong.

By Ekow Quandzie