IMF appraises Ghana’s fiscal outlook

 

terkperThe International Monetary Fund (IMF) says it is appraising Ghana’s fiscal outlook for the rest of 2016 to ascertain the country’s adherence to fiscal discipline.

The Washington-based lender said it would consider the third review of the country’s $918 million assistance programme next month subject to the outcome.

The IMF, which is an organisation of 189 countries, works to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world

Ghana, which exports cocoa, gold and oil, signed the three-year aid deal in April last year to bring down budget deficits, inflation and a high public debt.

IMF Ghana mission chief Joel Toujas-Bernate said in a statement: “Discussions between staff and the authorities are currently ongoing to update macroeconomic projections, firm up the fiscal outlook for the remainder of 2016 and ascertain that financial pressures in SOEs will not pose additional risks to the central government budget.

“Subject to a quick and positive conclusion of these discussions, staff expect the third program review to be considered by the IMF Executive Board around mid-September,” he said.

The government had expected the executive board to conclude the third review in June to enable it receive a fourth disbursement of around $115 million in balance of payment support.

Ghana has agreed to remedial measures including financial and institutional reforms to cut spending and spur growth.

Finance Minister, Seth Kerkper, led a delegation to Washington a fortnight ago to reassure IMF officials of the government’s commitment to the three-year loan deal and to help restore investor confidence after a failed attempt to issue a $500 million Eurobond.

He said last week the IMF deal was yielding positive results and that Ghana was on target to halve its fiscal deficit this year.

Ghana’s public debt eased to 63 per cent of GDP in May from 72 per cent at the end of 2015, while consumer inflation dropped to 16.7 per cent in July from 19 per cent in January, Mr. Terkper said, citing the impact of the deal.

The central bank expects inflation to slow to eight per cent, plus or minus two, by September 2017.

“We are set to halve the deficit from 12 per cent in 2012, and we have also started stemming the rate of growth of the public debt,” he said at a meeting of private businesses in Accra.

Mr. Terkper said the debt stock could rise marginally to 65-66 per cent of GDP on planned disbursements towards the end of the year but will remain below 70 per cent.

 

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