Ghana’s Economy Endures Struggles Despite IMF Support, Asserts Finance Minister

Ghana’s Finance Minister Dr. Cassiel Ato Forson reports significant economic strain despite IMF support. Key targets such as inflation control and primary balance are unlikely to be met, with rising inflation and a worsening fiscal deficit. The government remains committed to economic stabilization, admitting that further sacrifices are needed.

Ghana’s economic situation remains precarious despite initiatives supported by the International Monetary Fund (IMF), according to Finance Minister Dr. Cassiel Ato Forson. During his presentation of the 2025 Budget Statement in Parliament, he highlighted that advancements achieved under the IMF programme have necessitated considerable sacrifices from domestic bondholders, external creditors, and taxpayers, yet the economy is still facing substantial challenges.

The Finance Minister expressed significant concern over the likelihood of meeting critical targets under the IMF programme, which includes inflation control, social protection spending, and maintaining a primary balance on a commitment basis. With IMF’s fourth review approaching in April 2025, he noted that many structural reforms expected to be completed by the end of 2024 are lagging behind schedule.

Moreover, inflation rates have escalated from 23.2% in 2023 to 23.8% in 2024, far surpassing the government’s planned target of 15% and the IMF’s target of 18%. This rising inflation poses increased pressures on households and businesses, prompting discussions with the IMF regarding their Monetary Policy Consultation Clause.

In terms of fiscal balance, the primary balance has significantly worsened, shifting from a deficit of 0.2% of GDP in 2023 to a deficit of 3.9% of GDP in 2024, failing to achieve the targeted surplus of 0.5% of GDP. Dr. Forson attributed this deterioration to a lagging performance by the previous administration.

Despite these ongoing economic difficulties, Hon. Dr. Cassiel Ato Forson reaffirmed the government’s commitment to stabilizing the economy. He emphasized that achieving this stability will require continued sacrifices and the implementation of tough decisions moving forward.

In summary, Ghana’s economy continues to face considerable challenges despite ongoing IMF support. The Finance Minister, Dr. Cassiel Ato Forson, has articulated concerns regarding inflation rates, fiscal balance, and structural reforms, all of which remain in distress. The government reaffirms its commitment to stabilizing the economy, yet recognizes the necessity for ongoing sacrifices and difficult choices in the path ahead.

Original Source: www.gbcghanaonline.com