The International Monetary Fund’s (IMF) director for Africa has indicated that the favourable economic growth for the country from next year will be based on sticking to some critical fiscal policies.
Abebe Aemro Selassie noted that “provided that, inflation can be brought down, real interest rates can be lowered, then that should allow some recovery in growth”.
This was in response to a question at the Annual IMF/World Bank meeting in Washington DC on what should be done to ensure the favourable economic growth outlook for Ghana from 2017 is achieved.
He was of the view that, the favourable economic outlook for Ghana is conditional “based on government also continuing with, the fiscal adjustment program”.
Economic growth for Ghana has slowed from 4 percent in 2015 to about 2.5 percent for the second quarter of 2016 according to the Ghana Statistical Service.
Government is looking at growing, at about 4.8 percent, however, the IMF is projecting about 3.3 percent for Ghana.
On the issue of the IMF being too optimistic about the growth, Mr Aemro Selassie said, “I don’t think this is particularly optimistic, given, the recent growth record.”
The Africa boss of the IMF noted “I think our focus is always going to be conditional. It’s difficult to make an unconditional, forecast because of growth outcomes, we think, are related to policies.
“This is because we have seen elevated macroeconomic imbalances over the last few years, very high-interest rates. That has manifested itself and having been one of the factors holding things back.”
Answering questions on why the gains at the macro level have not translated to the micro level, he said it’s not just a Ghanaian issue, but the continent as a whole.
“I think this is a challenge, frankly region-wide issue, where there is a lot of questioning about what all this growth has done,” adding it’s going to take a while and years of sustained growth for the tangible benefits of growth to be seen.
Abebe Aemro Selassie says government should be commended for some measures taken which saw growth pick up to about 4 percent last year which was somewhat significant.
According to him, that can be described as somewhat encouraging adding, “going forward, we see a little bit of a pickup in growth to around 5.5 – 6 percent, I think, over the medium term.“