Ghana's growth projected to gradually increase to 5% beyond 2024 – IMF

Beyond 2024, Ghana’s Gross Domes­tic Product (GDP) growth is projected to gradually increase to its potential level of about 5.0 per cent.

This is consistent with many forecasts by international research institutions.

According to the Interna­tional Monetary Fund (IMF) Country Report on Ghana, the macroeconomic outlook remains positive.

Notwithstanding head­winds from the continued fiscal consolidation and the ongoing dry spell, the Fund said the strong outturn for 2024 quarter 2 real GDP growth points to greater-than-expected underlying growth.

Hence, it revised its growth projection for 2024 upward to 4.0 per cent (3.1 per cent at the 2nd Economic Credit Facility (ECF) review).

The Fund also projected that inflation would reach 18 per cent by end-2024 (revised up from 15 per cent), mainly reflecting price pressures from a weaker cedi and the dry spell.

“Continued tight monetary policy will bring inflation back to the Bank of Ghana’s target band (8±2 per cent) by end-2025,” the Fund said.

Further progress on fiscal consolidation and the completion of the debt restructuring, it ex­plained would ensure that Ghana’s public debt is firmly on a sustain­able trajectory.

Also, the current account deficit is projected to remain in balance until 2026, while inter­national reserves would reach 3 months of import coverage.

Nevertheless, the IMF re­vealed that the downside risks to the outlook remained high.

On the external side, it point­ed out that an intensification of regional conflicts, and spillovers from the conflicts in Ukraine and the Middle East, or commodity price volatility would negatively impact Ghana through higher im­ported inflation and risk aversion.

“If protracted, weak cocoa harvest could affect exports and growth prospects. More generally, Ghana is subject to risks related to climate shocks. On the domes­tic side, policy slippages ahead of the end-2024 general election or during the political transition could undermine macroeconom­ic stability, deteriorate domestic financing conditions and the debt dynamics, and complicate debt restructuring discussions with Ghana’s remaining external com­mercial creditors, it indicated.