Gov't is less optimistic about how economy will perform - Prof. Bokpin
A senior lecturer at the University of Ghana Business School, Prof. Godwin Alufar Bokpin, is of the view that Ghana's economy is going to be in recession or is in recession this year, 2023.
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The Professor of Finance believes that all technical indicators attest to the fact that Ghana's economy is in recession or going to be in recession.
Taking his turn at the Graphic Business Twitter Dialogue series, on Thursday [August 3], Prof Bokpin said "government is less optimistic now compared to eight months ago in terms of how they felt the economy will perform."
The Dialogue which was hosted on the theme, "Views of the investments analysts on the Mid-year Budget" and "The Mid-year Review Budget and it’s implications" had Mr. Michael Cobblah, the Chief Executive Officer of C-Nergy Ghana also as a speaker together with Prof. Bokpin.
In addition, Prof. Bokpin said, eight months ago, government was more optimistic about how the economy was going to perform in 2023 but same cannot be said of today in terms of how the economy will perform.
He was of the view that the government’s uncertainty about Ghana's economic performance this year came to light in the downward revisions of some macro-economic targets in the recently presented Mid-Year Budget Review.
“Now, my considered view after reading through the Mid-Year Budget Review is that eight months ago, government was more optimistic about how the economy was going to perform in 2023. But what we see in the Mid-Year Review is an admission that eight months down the line, government is less optimistic about how the economy is going to perform and that position has informed the revision of the macro targets,” he explained.
“...so you will see that overall GDP growth was projected to be 2.8 per cent in the 2023 budget; in the Mid-Year Review, we have aligned it with the IMF projection....so GDP projection has been revised downwards from 2.8 per cent to 1.5 per cent—that is a variance of more than 46 per cent,” Prof. Bokpin observed.
For him, “Government is less optimistic now compared to eight months ago in terms of how they fell the economy will perform”, adding “the implication of that is that technically, the economy will be in recession this year or is in recession this year because once the rate of GDP growth is lower than rate of population growth, technically, your economy is in recession, GDP per capita terms.”
The Professor of Finance also said “...because the average GDP growth for this year is 1.5 per cent; population is expected to grow this year by two per cent or 2.2 per cent so that tells you that GDP per capita terms, our economy is in recession.”
Additionally, Prof. Bokpin explained that “when you look at non-oil GDP growth, the projection in the 2023 budget was 3 per cent; this has been revised to 1.5 per cent—the variance there is 50 per cent…”
He explained that although government set out to bring inflation down to 18.9 per cent in the 2023 budget, government is now revising the target to 31.3 per cent with a variance of more than 65 per cent.