Economic Analyst John Gatsi is calling for a revision of all macro economic targets for this year.
The call comes after the Ghana Statistical Service announced a miss in the economic growth target for last year as well as the Bank of Ghana’s expressions that the inflation target of 9.5 percent for this year will not be met.
Ghana’s inflation rate currently stands at about 14.5 percent the highest since 2010.
Governor of the Central Bank, Dr Henry Wampah says an evaluation of the current economic situation casts doubt on achieving the target.
He indicates the 9.5 percent target will be achieved by the middle of 2015.
Economist John Gatsi speaking to Citi Business News says an assessment of the current economic conditions require new macroeconomic targets to be set.
He says unless there are some new measures government intends to execute, the existing initiatives are unlikely to aid meet any of the set economic targets.
“We must review the forecasts, so that at the end of the financial year, it will be a true reflection of what is expected of you. If you look at developments with respect to foreign exchange volatility, inflation and other difficulties taking place in the economy, power outages, access to credit and the general difficulty this year, it stands to reason that there is the need to review the general macroeconomic forecasts for the country. This is not bad. It is done in every economy”, he said.
John Gatsi recommends that government revises this year’s GDP growth target to 7.5percent.
The Statistical service on Wednesday announced Ghana’s economy last year grew by 7.1 percent, indicating the growth target of 8 percent had been missed.
According to Gatsi “our target this year should be around 7.5percent, rather than the 8.0percent because the economic outturns and the things happening in 2014 are quite challenging that they may not reflect very well in the expectation of the growth.”
He went on to explain that, “economic targets should be set within a certain context. If the context in which setting the target is rough, it must reflect the target. If conducive, it must also reflect the target. The target was set based on some good expectation of the environment, but the environment is turning out to be rough, it is only fair for all of us to change our expectation by changing the target.”
The Bank of Ghana’s revised inflation target for this year is 12 percent.
John Gatsi indicates the inflation target should still be revised further to 13 percent as the 12 percent may not be met.
“It very clear that inflation will not go below 13 percent by the close of the year and so we need to revise that. Revising it means you are responding to the realities of the economy.”
By: Anim Kwaku Boadu/citifmonline.com/Ghana