IMF projects 13% growth in Ghana’s economy in 2011

The International Monetary Fund (IMF), a member of the World Bank Group has projected Ghana’s economy to grow by about 13 per cent this year.

According to the IMF the expansion of the economy will be as a result of growth in the non- oil sector and the start of oil production in the country.

“For 2011, the economy is projected to expand by about 13 percent, broadly evenly divided between growth of the non-oil economy and the start of oil production. The balance of payments is projected to remain in surplus, despite further import growth”, said Mr Peter Allum, IMF Mission Chief for Ghana, in a press release published on its website.

Mr Allum, who visited the country together with his IMF team from February 16-March 1, 2011, said it had discussions with government officials for the third and fourth reviews under the IMF’s Extended Credit Facility (ECF) and for the 2011 Article IV consultations.

On budget policy, Mr Allum and his mission recommended to government that an additional effort should be done to strengthen the projected 2011 outturn, both to limit near-term financing needs and put the budget on a sounder footing over the medium term.

The IMF mission says Ghana’s tax revenues, at less than 14 percent of GDP in 2010, fall well below the average of 20 percent of GDP for lower middle-income countries and discussions with Dr Kwabena Duffuor, Ghana’s Finance Minister, focused on how to improve revenue performance, as well as on the government’s plans to strengthen expenditure control and develop a comprehensive strategy for managing arrears and related obligations.

The mission also held talks with Kwesi Amissah-Arthur governor of the Bank of Ghana.

“Discussions with the Bank of Ghana focused on sustaining low inflation and policies to address non-performing loans in the banking sector. Risks to inflation have shifted to the upside, reflecting rising demand pressures, global commodity prices, and easing domestic liquidity. To consolidate inflation in single digits, policy tightening may be needed in the course of 2011” Mr Allum said.

“During the mission, progress was made in identifying options to further strengthen fiscal performance and agreement was reached on a range of other policy issues. Continuing discussions will seek to confirm a policy framework that could allow the IMF Executive Board to consider the third and fourth reviews under the ECF together with the 2011 Article IV consultation in May 2011”, He added.

By Ekow Quandzie

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