... macroeconomic outlook is more fragile
Fitch Ratings said it raised the outlook on the Republic of Ghana's 'B+' long-term foreign and local currency issuer default rating to stable from positive.
In many respects, Ghana remains a trendsetter in sub-Saharan Africa: the economy is growing rapidly, reforms are continuing apace and governance is good by regional standards. However, sizeable fiscal and current account imbalances coupled with a rising gross external financing needs, means that Ghana's macroeconomic outlook is more fragile than it was, Fitch's said.
Fitch added that Ghana is facing testing times with strong growth exposing severe capacity constraints, notably in the energy sector, while higher oil prices have delivered a 'significant' external shock.
This added to central government deficit rising four-fold to 7.8 pct of GDP in 2006, while preliminary data for 2007 point to a deficit of 5.8 pct compared to a budgeted 3.2 pct.
While the recent spike in inflation owes much to hikes in utility prices, single digit inflation has remained elusive, the release said.
