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IMF lowers Ghana’s growth rate to 1.6% in 2023

The IMF has cited fiscal slippages caused by high debt and budget deficit, reducing government spending in infrastructure and investments, as the major reasons for the low projection

The International Monetary Fund(IMF) has lowered Ghana’s growth rate projection from 2.8% to 1.6% for 2023.

This is contained in the Fund’s World Economic Outlook, which was released on Tuesday, 11 April 2023.

The IMF has cited fiscal slippages caused by high debt and budget deficit, reducing government spending in infrastructure and investments, as the major reasons for the low projection.

It has, however, predicted that Ghana’s economy will expand by 2.9% in 2024.

The IMF has lowered its baseline forecast for global output growth by 0.1 percentage point to its prediction in January 2023.

Global output growth is expected to fall from 3.4% last year to 2.8% in 2023, before rising to 3% in 2024.

Advanced economies are expected to see a growth slowdown from 2.7% in 2022 to 1.3% in 2023.

Global headline inflation is set to fall from 8.7% in 2022 to 7% in 2023 on the back of lower commodity prices.

“But underlying core inflation is proving to be stickier. Importantly, this outlook assumes that recent financial stresses remain contained,” said Pierre-Olivier Gourinchas, the IMF’s chief economist.

According to the IMF, much uncertainty clouds the short- and medium-term outlook as the global economy adjusts to the shocks of 2020–22 and the recent financial sector turmoil.

The IMF’s projection for Ghana is coming a few months after the World Bank cut the country’s growth rate forecast for this year to below 2%.

Reporting by Nana Oye Ankrah in Washington DC

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