Finance Minister Ken Ofori-Atta announced significant revisions to Ghana’s macroeconomic and fiscal frameworks during the presentation of the 2023 mid-year budget review on July 31.
The revisions were made to align with the targets of the IMF-supported Programme for Economic and Growth (PC-PEG) due to recent developments and global economic conditions.
Notable revisions include a decrease in the overall real GDP growth rate to 1.5% from 2.8% and the non-oil real GDP growth rate to 1.5% from 3.0% for 2023.
Additionally, the end-period headline inflation is projected to reach 31.3%, compared to the previous estimate of 18.9%.
The fiscal framework has also been adjusted, resulting in a revised primary balance deficit of 0.5% of GDP, in line with the IMF-supported PC-PEG fiscal consolidation path.
Despite the current slowdown, the government is optimistic about economic recovery.
Announcing some macroeconomic targets for the rest of the year, Finance Minister Ken Ofori-Atta expressed optimism that there could be a rebound in the economy in the coming year.
“Mr. Speaker, the overall Real GDP growth for 2023 has been revised to 1.5 percent from 2.8 percent, and non-oil Real GDP growth has also been revised to 1.5 percent from 3.0 percent. The downward revision in projected growth for 2023 is an indication of a broad slowdown in the three sectors of the economy as a result of factors such as the fiscal consolidation plan and difficult global conditions,” he said.
“Mr. Speaker, overall GDP Growth is, however, projected to rebound to 2.8 percent, 4.7 percent, and 4.9 percent in 2024, 2025 and 2026, respectively. This is a result of implementation of growth-oriented and structural transformation strategies in the PC-PEG,” he added.
Mr. Ken Ofori Atta noted that: “This was necessary because the framework was guided by the September 2022 data, that underpinned the 2023 Budget in November 2022. The revisions to the macro-fiscal framework generally seek to align the 2023 Mid-Year Fiscal Policy Review with the IMF-ECF supported PC-PEG”.