Public expenditure may overrun ahead of December 2024 elections – Fitch Solutions

Ahead of the December 2024 general elections, Fitch Solutions is predicting a significant increase in public expenditure.

Expounding on its prediction, the UK-based financial firm believes that the ruling New Patriotic Party (NPP) would spend heavily to court public sympathy against its biggest political competitor and the largest opposition party in Ghana, the National Democratic Congress (NDC).

“A more expansionary fiscal stance will inject additional demand into the economy. While the authorities have confirmed their commitment to implementing fiscal reforms in line with Ghana’s IMF programme, we anticipate significant public expenditure overruns ahead of the December 2024 general election, particularly given that the ruling New Patriotic Party (NPP) trails behind in the polls,” parts of a report from Fitch Solutions read.

According to Fitch Solutions, in the last century, the expenditure of successive governments during election years has increased by 3.0 per cent, representing the government’s tendency to subsidise utilities and implement social welfare programmes to garner public support.

“We anticipate that such measures will be implemented again in 2024, improving disposable incomes and stimulating household spending. All told, we forecast private consumption growth to tick up to 3.8% in 2024 – from 3.2% in 2023 – contributing 2.9 percentage points to headline real GDP [Gross Domestic Product] growth”.

Again, the likely implementation of social support programmes ahead of the December 2024 elections will support disposable incomes and stimulate domestic consumption.

EAN/OGB

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