\n
Credit rating agency, Fitch Ratings, has affirmed Ghana at \u2018B\u2019 with a stable outlook, citing medium-term growth potential and improving macroeconomic stability.<\/p>\n
It noted that falling inflation will allow Bank of Ghana to continue lowering monetary policy rate and take other actions to loosen monetary policy.<\/p>\n
According to Fitch, Ghana\u2019s non-oil domestic output is expected to continue to grow as power provision improves while banks continue to clear non-performing loans from their balance sheets.<\/p>\n
<\/p>\n
Key rating drivers<\/b><\/p>\n
It explained that the ratings reflect the country\u2019s medium-term growth potential and improving macroeconomic stability, which is supported by the authorities\u2019 commitment to putting public finances on a sustainable path.<\/p>\n
\u201cThis is balanced against high government debt, existing weakness in public finances, and low GDP per capita.<\/p>\n
\u201cFiscal outruns from the first half of 2017 indicate that the government\u2019s fiscal consolidation efforts remain on track.<\/p>\n
\u201cRevenues have underperformed their mid-year budget targets, but reported expenditure has been lower as well,\u201d it added.<\/p>\n
Fitch expects the general government deficit on a cash basis to narrow to 7.3% of GDP, down from 9.3% in 2016.<\/p>\n
The credit rating agency\u2019s forecast is higher than the government\u2019s forecast of 6.3%, reflecting the view that tax cuts included in the budget to spur economic activity will keep revenues lower than envisaged.<\/p>\n
\u201cMoreover, the risk of off-budget spending and the accumulation of new arrears remains a risk.<\/p>\n
\u201cGhana\u2019s high public sector debt level stabilised in 2016. Fitch forecasts general government debt to fall to 71% of GDP in 2017, down from 73% at end-2016.<\/p>\n
\u201cFalling government debt is positive for Ghana\u2019s ratings, but the current debt level is higher than peers, both as a percentage of GDP (the \u2018B\u2019 median is 56% of GDP) and a percentage of revenue. Ghana\u2019s general government debt\/revenue is 364%, well above the \u2018B\u2019 median of 227%.<\/p>\n
\u201cDomestic payment arrears and contingent liabilities from energy sector SOEs present additional debt sustainability risks,\u201d it said.<\/p>\n
Fitch noted that the accumulation of GH\u00a21billion in new arrears in 2016, along with GH\u00a25 billion in outstanding expenditure claims, brings the total stock of outstanding government arrears to as much as 3% of GDP. Furthermore, a recent audit estimated energy sector SOE arrears to domestic banks, suppliers and other SOEs at 13% of GDP.<\/p>\n
Fitch forecasts real GDP growth of 6% in 2017, up from 3.5% in 2016.<\/p>\n<\/div>\n
\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\u0642\u0627\u0644\u0628 \u0648\u0631\u062f\u067e\u0631\u0633<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Credit rating agency, Fitch Ratings, has affirmed Ghana at \u2018B\u2019 with a stable outlook, citing medium-term growth potential and improving macroeconomic stability. It noted that falling inflation will allow Bank of Ghana to continue lowering monetary policy rate and take other actions to loosen monetary policy. According to Fitch, Ghana\u2019s non-oil domestic output is expected […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-419527","post","type-post","status-publish","format-standard","category-business"],"yoast_head":"\n
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