International Monetary Fund revises Ghana’s GDP growth rate downwards to 7.5%, here’s how it may affect the economy

The International Monetary Fund (IMF) has revised Ghana’s economic growth for this year downwards by 1.3 percent.

IMF Chief Economist, Gita Gopinath

The Fund is now projecting a 7.5 per cent growth rate for the country by December 2019.

This was contained in the IMF’s World Economic Outlook Report released on Wednesday, October 16, 2019, at the ongoing IMF/World Bank Annual Meetings in Washington DC.

The IMF in April this year projected an 8.8 per cent growth rate for Ghana.

It was then basing its forecast on expected pick up in commodity prices, oil as well as some policy response measures that the government is expected to implement this year.

Despite this downward review, this would still be the highest expected growth rate for Ghana by IMF since 2017, when the FUND then projected an 8.1 per cent GDP growth.

Why the revision

According to the report, the revision was due to the expected reduction in crude oil production as well as oil prices declining on the international market.

The move was also influenced by the reduction in cocoa production by the country than was earlier forecast by COCOBOD.

Impact of the revision on the economy

The revision may not come with any serious negative impact on the country’s economy.

This is based on some engagements that by some economists who spoke to Accra based JoyBusiness on this latest forecast by the IMF.

Some noted that it is because the revision has been impacted external factors, which has affected demand for our commodities and exports.

Others are of the view that situation calls for some drastic measures to lessen the impact of declining earnings from exports on the economy, like possibly cutting down on export to accommodate revenue shortfalls.

About the IMF Report

The 188-page report put together by the research department of the IMF looks at the global economy, opportunities, threats as well as reviewing the economics 189 members of the Fund.

The Governor of the Bank of Ghana, Dr Ernest Addison at the recent MPC Meeting noted that the bank may soon have a look at review the inflation target when the current term expires, possibly looking at a lower band.

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