The Chief Economist of the Standard Chartered Bank, Ms Razia Khan, has indicated that the country’s economic growth for 2017 came as a surprise to most economists as the growth far exceeded expectations.
Stressing more on the country’s non-oil GDP which grew by 4.7 per cent, she said that was not expected as the country was going through significant fiscal adjustments.
Ms Khan said this when she addressed the media on the country’s economy in Accra.
“In terms of our own focus and expectations, Ghana was going through a very significant macro-economic rebalancing and very significant fiscal adjustments; and normally when fiscal targets are marked by expenditure having to be cut because of revenue shortfalls, the thinking will be that growth will be quite moderate so the headline growth in the economy really surprised us.
“We did not expect such a robust performance from the non-oil economy given the fiscal adjustment that was underway. For any economy that is undergoing adjustments, it was very unusual to see that kind of robust growth,” she added.
Touching on the economic outlook for the country, she said Ghana stood tall among its peers in the sub-Saharan region due to the rebalancing of the economy and the efforts in sustaining macro-economic stabilisation.
She added that the rising oil and gas production and the promise of more stable energy at a lower cost would provide additional boost for growth.
“Although the country is going through fiscal adjustments, it doesn’t necessarily mean there is going to be such a tight squeeze in spending that there is not going to be any growth,” she stated.
On the non-oil GDP, she stated that the major drivers would be inflation which reduced to 9.6 per cent last month, and the extension of credit to the private sector which would come as a result of the recapitalisation of the banks.
Commenting on the IMF’s extended credit facility programme, she said it had brought significant benefits to the country.
She added that investors began to see the country differently due to the programme.
“They saw a country that was not only reforming but creating an environment for the IMF to manage it very stringently and what these investors expect now is the institutionalisation of some of these requirements under the programme,” she stated.
“The country needs to get its fiscal deficit under control and so far, its decision to make the five per cent deficit of GDP cap as a legislation is good because when it becomes part of the law, then you wouldn’t need to go from one IMF programme to another in order to control your deficit,” she added.
She said the IMF programme was what the country needed due to the fiscal imbalances, and added that the country had so far performed well under the programme and now had to build on it.