This development, fueled by rising food and fuel prices has dimmed hopes for the country’s projections of attaining single digit inflation.
The cedi has depreciated against the world’s major currencies, and bank base rates which stood around 18 percent are now standing at about 27 percent.
Government is expected to spend 14 percent of GDP to service fiscal deficits and balance of payments deficits would grow.
An Economic Consultant, Kwamena Agyei says for government to tackle the situation, it must control expenditure.
He was speaking on a Joy Business News bulletin monitored by ghanabusinessnews.com. He said “we would have to return to an era of smaller fiscal deficits, and this will call for increasing revenue while we try to control expenditure.”
Mr. Agyei said the current price of fuel which is only a fraction of what it was in June/July 2008, does not make the outlook appear too bad.
Importantly, he said “we need to address the area of government expenditure.”
By Emmanuel K. Dogbevi