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31 July 2017

Ghana’s economy is back on track – Finance Minister

Finance Minister, Ken Ofori-Atta, Monday, July 31, 2017, stormed Parliament and told Members that the pragmatic policies measures the government of the New Patriotic Party (NPP) has put in place with the hope of fixing the broken Ghanaian economy is beginning to yield positive results.

“Mr. Speaker, we promised to stabilize the economy in a sustainable manner, while accelerating growth and creating prosperity and jobs for all. The macro-fiscal performance we have achieved in the first six months of President Akufo-Addo’s administration is showing remarkable progress. The major macroeconomic indicators are trending in the right direction indicating that the economy is back on track,” he noted.

He added “Developments from January up to June 2017, indicate that the President’s policies and programs are yielding the expected result, and, in some cases, exceeding expectations.”

For instance, he said GDP for first quarter of 2017 grew by 6.6% against 4.4% for the same period in 2016.
In addition to that, inflation reduced to 12.1% at the end of June 2017, from 15.4% at the end of December 2016 while interest rate is also on the decline.

Furthermore, the fiscal deficit as a percentage of GDP for the period January-June 2017 was 2.7% compared to a deficit of 4.0% over the same period in 2016.

The primary surplus for January-June 2017, he added, was 0.6% of GDP compared to a deficit of 1.3% over the same period in 2016 while the country’s gross international reserves at the end of June 2017 also hit US$5.9billion, the equivalent of 3.4 months of import cover, up from US$4.9billion at the end of December 2016 (equivalent of 2.8 months of import cover).

“Mr. Speaker, these indicators clearly show that the economy is on the path of recovery and investor confidence has been restored. Additionally, the business and consumer confidence surveys by the Bank of Ghana conducted in June 2017 broadly reflects positive sentiments in the direction of the economy as noted in the July edition of the Bank of Ghana’s MPC press release,” he noted.

Mr. Ofori-Atta revealed this when he presented the mid-year fiscal policy review of the 2017 budget statement and economic policy of the Government of Ghana.

Ghana has set up its medium term macroeconomic framework aimed at specific macroeconomic targets for 2017 which include:

. overall GDP growth rate of 6.3 percent;

  • non-oil GDP growth rate of 4.6 percent;
  • end-year inflation rate of 11.2 percent;
  • average inflation rate of 12.4 percent;
  • overall fiscal deficit of 6.5 percent of GDP;
  • primary surplus of 0.4 percent of GDP; and
  • Gross Foreign Assets to cover at least 3 months of imports of goods and services.
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