The Institute of Statistical, Social and Economic Research (ISSER) said on Thursday that while there was generally a marked improvement in the macro-economy, growth has been difficult to sustain.
Presenting the 2008 State of the Economy Report, Professor Ernest Aryeetey, said the country was still struggling with how to get the best out of public expenditure in order to achieve sustainable growth without jeopardizing macro-economic stability.
“There is no guarantee that growth rate will be repeated because of the impact of global factors on our economy,” he said.
Prof. Aryeetey said it was remarkable that despite the food and oil crises the country’s economy showed resilience, with an official growth rate of 7.3 per cent after a 6.3 per cent rate in 2007.
He said while this was the highest growth rate in decades, it was mainly due to more government consumption spending and investment.
However, Prof Aryeetey said the growth figure raised the debate about national accounting standards and methods and the proper interpretation of growth figures in developing countries.
“The fact that Ghana ended the year with huge fiscal deficits of 14.9 per cent of GDP also raises questions about the relationship between fiscal deficits and economic growth.”
The agricultural sector remains the largest contributor to national output with a growth rate of 5.1 per cent in 2008 while industrial growth went up to 9.8 per cent in 2008 and services growth fell from 8.2 per cent in 2007 to 6.9 per cent in 2008.
Prof. Aryeetey said sustained growth could only be attained through structural changes by breaking the reliance on few export commodities.
He said the main problem with the economy was poor management of resources and not the inability of government to generate enough revenue.
He said while the country had significantly improved revenue collection in the past few years, the impact was yet to be felt leaving the economy in a bad shape.
Prof. Aryeetey said there was still hope for the economy if government reduced expenditure and bridged the gap between the rich and the poor by providing jobs, especially for those below the poverty line.
Dr Charles Ackah, Research Fellow ISSER, attributed the trend of unsustainable growth to the structure of the economy with dependence on gold, cocoa and timber, which had remained unchanged over the years.
Launching the publication, Prof. Samuel Agyei-Mensah, Dean of the Faculty of Social Studies, University of Ghana, said government should use the report to guide it in the formulation of policies to transform the lives of the people.