Ghana’s economic recovery has surpassed expectations, according to the Governor of the Bank of Ghana, Ernest Addison. Recent data suggests that the country’s GDP will expand by around 3% this year, a figure much higher than the International Monetary Fund’s forecast of 1.6%. Despite facing its worst economic crisis in decades, characterized by double-digit inflation and rising public debt, Addison remains optimistic about Ghana’s economic outlook. He stated that the implementation of economic reform programs, supported by a $3 billion IMF package, has led to positive outcomes such as stabilized exchange rates, lower inflation, and strong economic growth in the first two quarters of the year.
While the economic hardships triggered anti-government protests in Ghana’s capital city, positive results from the reform programs have been observed after four months of implementation. The country’s inflation rate decreased to 40.1% on a year-on-year basis in August, down from 43.1% in July. Although it still exceeds the central bank’s target band, this indicates progress in the right direction. Addison credited the success to the policy mix under the IMF extended credit facility, which has improved economic activity, stabilized the exchange rate, decreased inflation, and bolstered foreign exchange reserves.
The central bank anticipates continued disinflation but emphasizes its readiness to take action if necessary. In July, the main interest rate was raised by 50 basis points to prevent a disinflation trend from derailing. Addison revealed that negotiations with external creditors are underway, and he expects the upcoming IMF financing tranche and other inflows to contribute to maintaining stability. Overall, Ghana’s economic recovery has exceeded expectations, but challenges remain as the country works towards long-term growth and stability.
