The Finance Minister, Ken Ofori-Atta says the economy is on track as major macroeconomic indicators are now trending in the right direction.
He said the Akufo-Addo government promised to stabilize the economy in a sustainable manner while accelerating growth and creating prosperity and jobs for all and they, are on course to achieving that.
Presenting the mid-year budget review to Parliament Monday, he said, “the macro-fiscal performance we have achieved in the first six months of President Akufo-Addo’s administration is showing remarkable progress.”
“Mr. Speaker, to put the performance of the economy in the first half of 2017 into perspective, it will be useful to remind ourselves of the macroeconomic targets we set for ourselves for the 2017 fiscal year based on the overall macroeconomic objectives of government,” he said.
Government’s macroeconomic framework for 2017 aims at ensuring macroeconomic stability, shifting the focus of economic management from taxation to production, protecting the preferential option for the poor and making the machinery of government work to deliver the benefits of progress for all Ghanaians.
Anchored on the medium term macroeconomic framework, the specific macroeconomic targets set for 2017 included overall GDP growth rate of 6.3 percent, non-oil GDP growth rate of 4.6 percent, end-year inflation rate of 11.2 percent, average inflation rate of 12.4 percent, overall fiscal deficit of 6.5 percent of GDP, primary surplus of 0.4 percent of GDP and Gross Foreign Assets to cover at least 3 months of imports of goods and services.
According to the Finance Minister, “developments from January up to June 2017, indicate that the President’s policies and programmes are yielding the expected results, and, in some case exceeding expectations.
“The GDP for first quarter of 2017 grew by 6.6 percent against 4.4 percent for the same period in 2016 and inflation reduced to 12.1 percent at the end of June 2017, from 15.4 percent at end December 2016,” he told Parliamentarians.
He said interest rates are on the decline citing the 91-day treasury bill rates has reduced from 16.4 percent at end 2016 to 12.08 percent at end June 2017.
Mr Ofori-Atta also said the fiscal deficit as a percentage of GDP for the period January-June 2017 was 2.7 percent compared to a deficit of 4.0 percent over the same period in 2016.
“The primary surplus for January-June 2017 was 0.6 percent of GDP compared to a deficit of 1.3 percent over the same period in 2016; and the Gross International Reserves at the end of June 2017 was US$5.9 billion, the equivalent of 3.4 months of import cover, up from US$4.9 billion at the end of December 2016 (equivalent to 2.8 months of import cover),” he said.
He added that indicators clearly show that the economy is on the path of recovery and investor confidence has been restored.
“The business and consumer confidence surveys by the Bank of Ghana conducted in June 2017 broadly reflects positive sentiments in the direction of the economy as noted in the July edition of the Bank of Ghana’s MPC press release.
“Based on the significant progress that has been made in macroeconomic stability and improvements in real GDP growth, the Fitch Rating Agency, on 12th May 2017, revised its outlook on Ghana’s long term foreign and local currency Issuer Default Ratings (IDR) from Negative to Stable and affirmed the country’s IDR at B,” he said.
Mr Ofori-Atta said the government is optimistic that it will sustain the gains made in macroeconomic stability and instill more confidence in the economy for both domestic and international investors.