Ghana’s government said on Monday it had roughly halved this year’s economic growth forecast and saw higher inflation and a primary deficit whereas it was hoping for a surplus previously.
Finance Minister Ken Ofori-Atta also disclosed during a mid-year budget review in parliament that last year’s budget deficit was 11.8% of gross domestic product (GDP), almost double the target of 6.3% of GDP.
The West African nation has been grappling with its worst economic crisis in a generation and is restructuring its debt as a condition for receiving an International Monetary Fund support programme.
Ofori-Atta told lawmakers that the government now saw the economy growing 1.5% in 2023, versus 2.8% previously, reflecting fiscal consolidation measures and difficult global conditions.
He said growth was expected to pick up to 2.8%, 4.7% and 4.9% in 2024, 2025 and 2026, respectively.
The finance ministry now sees headline inflation of 31.3% at the end of the year, compared with a projection of 18.9% given when the 2023 budget was first presented in November 2022.
The government had aimed in November for a primary budget surplus of 0.7% of GDP, whereas now it foresees a deficit of 0.5%/GDP.
Despite downgrading its 2023 forecasts, the finance minister said the new parameters were “fully aligned with the IMF programme fiscal objectives”.
The government has already shared scenarios and data with Eurobond holders to begin restructuring discussions, Ofori-Atta said.
“On the restructuring of Eurobonds, we expect to receive counteroffers from the bondholders in the short-term and envisage an agreement by year-end,” he added.
