Mid-year budget a signal of ‘stormy clouds’ ahead – Joe Jackson
Director of Operations at Dalex Finance, Joe Jackson, has said the 2023 mid-year budget review presented by Finance Minister Ken Ofori-Atta, signals difficult times for businesses and citizens in the months ahead.
Mr Jackson notes that a glance at the mid-year budget reveals that things are going to get a lot worse before they eventually become better.
According to him, businesses in the current economic environment and in the months ahead will have to cut down costs and possibly lay off staff to survive.
Speaking as a panelist on NorvanReports and Economic Governance Platform X Space Townhall Discussion on the Topic “Mid-Year Budget Statement: Recession or Growth Signal”, Mr Jackson quipped the Finance Minister’s assertion that the economy has “turned the corner” is a political talk and unjustified optimism.
In his view, there are many risks that exist and still pose significant challenges to the country’s full economic recovery and growth.
“The economy “turning the corner” is just political talk and unjustified optimism by the Finance Minister. Because there are a lot of risks still around, we can talk about high-interest rates, inflation, the external debt restructuring programme, the seemingly stable exchange rate, and a whole lot.
“Figures in the budget review are at odds with the figures that are expected to have the economy “turner the corner”. When you revise downwards GDP growth from the 4% growth recorded in the first quarter to 1.5% at the end of the year then that’s a recession,” he quipped.
“Then inflation is also around 31% at end-2023 from the earlier projected 18.9%, then that means inflation is not going to come down. Then there is gross reserves which will be 0.8 months (24 days) and that’s worse than it was last year. When I look at the numbers, particularly the gross reserves, I have a sickening feeling,” he added.
Key revisions to the macro-fiscal targets for the year 2023 according to the Finance Minister Ken Ofori-Atta encompass alterations to the overall Real GDP Growth rate, Non-Oil Real GDP Growth rate, End-period headline inflation, Primary Balance on Commitment basis, and Gross International Reserves.
The key revisions to the macro-fiscal targets for 2023 year include:
i. Overall Real GDP Growth rate of 1.5 percent down from 2.8 percent;
ii. Non-Oil Real GDP Growth rate of 1.5 percent down from 3.0 percent;
iii. End-period headline inflation of 31.3 percent, from 18.9 percent;
iv. Primary Balance on Commitment basis of a deficit of 0.5 percent of GDP compared to a surplus of 0.7 percent of GDP, aligning with IMF-supported PC-PEG target Primary balance;
v. Gross International Reserves (programme definition) sufficient to cover at least 0.8 months of imports of goods and services by 2023.
