Business News of 2014-04-23

Ghana’s growth rate to slow down

The International Monetary Fund (IMF) is predicting Ghana’s economic growth will slow down to a rate of 3.8 per cent in the next five years. According to the fund’s latest Economic Outlook Report, Ghana will record a growth rate of 4.8 per cent this year, and an end-of-year inflation rate of 12.3 percent.

The report provides analysis and projections of the IMF’s surveillance of economic developments and policies in its member countries.

According to the IMF, Ghana’s economy will this year witness a 4.8 percentage growth in its gross domestic product (GDP).

This figure is in agreement with projections made by the World Bank but, however, conflicts with government’s target of 8 percent.

The report projects a further growth in GDP by 5.4 per cent in 2015, but a staggering decline to a low growth of 3.8 per cent by 2019.

The IMF also projects inflation will steadily fall in the next five years.

The fund projects an average inflation rate of 13 percent for this year while it expects the year to end at a rate of 12.3 percent inflation. Inflation rate, however, currently stands at about 14.5percent.

The report pegs next year’s average inflation rate at 11.1 per cent and expects next year to end with an inflation rate of 9.8 per cent.

This projection is in agreement with the Bank of Ghana’s projection of single digit inflation by the middle of 2015.

According to the fund’s projections, Ghana will by the year 2019 have an inflation rate of about 8.1 per cent.

The IMF also noted that the current account balance of Ghana will improve over the next five years.

With records of Ghana’s current account deficit rising from 5.4 per cent in 2009 through to a staggering 13.2 per cent deficit in 2013, the fund indicates the deficit will decline to 10.6 per cent this year.

It projects a further improvement of the current account balance.

The report indicates the deficit will decline to 7.8 per cent in 2015 to 6.7 per cent in 2019.