Ghana’s Economy Under Strain Despite IMF Support, Finance Minister Reports

Ghana’s economy is under significant strain despite the IMF program, as Finance Minister Dr. Cassiel Ato Forson reported. Key targets are unlikely to be met, including inflation control and primary balance commitments. Inflation rose to 23.8% in 2024, missing government and IMF targets, while the primary balance deficit widened significantly. The government remains committed to economic stabilization, acknowledging the need for sacrifices.

Ghana’s economy continues to face substantial challenges, despite the progress made under the International Monetary Fund (IMF) supported program, as stated by Finance Minister Dr. Cassiel Ato Forson. He emphasized that the sacrifices endured by domestic bondholders, external creditors, and taxpayers have not alleviated the economic distress.

During his presentation of the 2025 Budget Statement to Parliament, Dr. Forson expressed concern regarding the government’s ability to meet critical targets set under the IMF program. Key areas of concern include inflation control, social protection expenditure, and primary balance commitments, which he fears will not be achieved by the upcoming April 2025 review.

Inflation levels, identified as a significant issue affecting living costs, increased from 23.2% in 2023 to 23.8% in 2024, surpassing both the government’s target of 15% and the IMF’s target of 18%. This rise has sparked dialogue with the IMF due to its impact on the affordability of living for households and businesses.

Furthermore, the primary balance, measured on a commitment basis, significantly worsened, with a deficit escalating from 0.2% of GDP in 2023 to 3.9% of GDP in 2024. This figure is far below the intended surplus of 0.5% of GDP and is attributed to a 4.4-percentage-point decline from the previous administration.

In light of these ongoing difficulties, Hon. Dr. Cassiel Ato Forson reassured citizens of the government’s unwavering commitment to economic stabilization. However, he reiterated that overcoming these issues will demand continued sacrifices and difficult decision-making from all stakeholders involved.

In conclusion, Ghana’s Finance Minister Dr. Cassiel Ato Forson has articulated the ongoing economic struggles faced by Ghana despite the IMF-supported program. With rising inflation and an increasing primary balance deficit, the government must remain dedicated to achieving financial stabilization while preparing for the necessary sacrifices and difficult decisions ahead.

Original Source: www.gbcghanaonline.com