Ghana’s public debt increases to almost 80% of GDP at GH¢393.4b

As at the end of June 2022, Ghana’s public debt has increased to GH¢393.4 billion, and that is 78.3 per cent of GDP.

According to the Bank of Ghana, that is compared with 76.6 per cent of GDP (GH¢351.8 billion) at the end of December 2021.

The breakdown is as follows: Domestic debt was GH¢190.1 billion (37.8 per cent of GDP), while the external debt was GH¢203.4 billion (40.5 per cent of GDP).

At its recent Monetary Policy Committee (MPC) press briefing the central bank outlined the following as impacting the debt stock.

It said the two inflation readings since its May MPC meeting pointed to continued broad-based upward pressure on prices, reflecting the pass-through effects of increases in ex-pump petroleum prices, transport costs, currency depreciation, and food prices.

It noted that headline inflation increased markedly from 23.6 per cent in April 2022 to 27.6 percent in May, and then further up to 29.8 per cent in June. Food inflation went up from 26.6 per cent in April to 30.1 per cent in May, and then to 30.7 percent in June 2022. On the other hand, non-food inflation moved from 21.3 per cent to 25.7 per cent, and then to 29.1 per cent in June 2022.

The Bank notes further that similar to the observed trends in headline inflation, underlying inflation pressures have also risen sharply.

The Bank’s core inflation measure, defined to exclude energy and utility, rose from 22.3 per cent in April 2022 to 26.4 per cent in May, and then to 28.4 per cent in June, it said adding that, weighted inflation expectations from businesses, banks, and consumers remained elevated in June 2022, it said.

It says the pace of month-on-month inflation has, however, slowed for the second consecutive time. After increasing by 5.1 per cent in April 2022, the monthly headline inflation slowed to 4.1 per cent in May, and then to 3.0 per cent in June. Month-on-month food inflation also increased at a rate of 5.8 per cent in April, 4.0 per cent in May and eased to 2.3 per cent in June 2022. Similarly, non-food monthly inflation also slowed from 4.6 per cent in April to 4.1 per cent in May, and further down to 3.6 per cent in June 2022.

On provisional data on budget execution for January to May 2022 the Bank said it indicated an overall broad fiscal deficit on a cash basis of 5.0 per cent of GDP, against a programmed target of 3.5 per cent of GDP.

The corresponding primary balance for the period was a deficit of 1.4 per cent of GDP, against a deficit target of 0.2 per cent of GDP. Over the period, total revenue and grants amounted to GH¢29.5 billion (5.9 per cent of GDP), below the projected GH¢34.8 billion (6.9 per cent of GDP), and  total expenditure was GH¢48.9 billion (9.7 per cent of GDP), below the programmed target of GH¢51.8 billion (10.3 per cent of GDP), it stated.

By Emmanuel K. Dogbevi
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