Ghana’s fiscal deficit will end the year at 9.75% of gross domestic product, missing a government projection of 8.8%, the International Monetary Fund (IMF) said yesterday, warning that fiscal imbalances could risk medium-term economic growth. Economic growth will slow to 4.5% this year from 7.1% in 2013 and international currency reserves will remain low despite inflows from a US$ 1bn Eurobond and a US$ 1.7bn cocoa loan this month, the IMF said in a statement following initial talks with Ghana over an assistance programme.
Ghana’s exports of cocoa, gold and oil made it one of Africa’s fastest growing economies but its expansion is undermined by escalating inflation, a stubborn budget deficit, a currency that has fallen sharply this year and low foreign exchange reserves. “Ghana continues to face significant domestic and external vulnerabilities on the back of a large fiscal deficit, a slowdown in economic growth and rising inflation. These vulnerabilities are putting Ghana’s medium-term prospects at risk,” the IMF said.
President John Mahama said this week the country hoped to start a three-year programme of financial assistance with the IMF in January. The IMF called its talks in Accra “constructive and candid” and said they would continue in Washington in a few weeks.