IMF forecasts 2.9% GDP expansion for Ghana’s economy in 2024
According to the International Monetary Fund’s (IMF) April 2023 Sub-Saharan Africa Report, Ghana’s economy is expected to expand by 2.9% in 2024, representing a positive outlook for the country’s economic growth. The projected growth rate is 1.3% higher than the 1.6% GDP growth rate projected for 2023. However, it is lower than the 3.2% GDP growth experienced by the Ghanaian economy in 2022.
Despite Ghana’s relatively optimistic growth outlook, the report highlights that the GDP growth in sub-Saharan Africa is expected to decline to 3.6% in 2023 due to a global slowdown. This slowdown is expected to result in a second consecutive year of decelerating activity, with the regional average being weighed down by sluggish growth in some key economies, such as South Africa.
Although some countries, particularly non-resource-intensive economies, are expected to register a small pickup in growth this year, the overall situation in the region remains concerning. For instance, sub-Saharan Africa’s public debt ratio has reached levels last seen in the early 2000s, standing at 56% of GDP in 2022. The increase in public debt has been driven by widening fiscal deficits, slower growth, and exchange rate depreciations due to overlapping crises, including the ongoing COVID-19 pandemic. This has raised concerns about debt sustainability in the region, with 19 of the region’s 35 low-income countries already in debt distress or facing high risk of debt distress in 2022, according to the October 2022 Regional Economic Outlook: Sub-Saharan Africa.
Against this backdrop, the IMF report suggests that Ghana’s projected growth rate for 2024 is a positive sign of economic progress. Nonetheless, the report underscores the need for continued vigilance in addressing the underlying structural issues that threaten to undermine the region’s long-term economic prospects. In particular, there is a pressing need for policymakers to prioritize measures aimed at promoting sustainable fiscal policies, reducing debt levels, and fostering inclusive growth that benefits all segments of society.
Looking ahead, the IMF report highlights that the global economic landscape remains highly uncertain, with risks to growth stemming from a variety of factors, including rising inflation, geopolitical tensions, and financial market volatility. Against this backdrop, the report suggests that policymakers in sub-Saharan Africa must remain vigilant and proactive in implementing policies that support growth and stability, while also remaining attuned to emerging risks and challenges.
The IMF’s latest report offers a mixed outlook for sub-Saharan Africa’s economic prospects, with Ghana’s projected growth rate for 2024 representing a positive sign of progress in an otherwise challenging environment. Nonetheless, the report underscores the need for policymakers to remain vigilant and proactive in addressing the structural issues that threaten to undermine the region’s long-term growth prospects. Ultimately, the region’s ability to navigate these challenges will depend on the extent to which policymakers can strike the right balance between short-term economic stabilization and long-term structural reforms.
