Fitch, a leading rating agency, has predicted a rebound in Ghana’s economy for the current year, fueled by anticipated government spending hikes typical of election years, coupled with strengthened private consumption.
Concerns have been raised regarding potential budget overshoots during election years, risking the gains achieved under the IMF program. However, Fitch suggests that increased government spending could propel the economy towards recovery.
The agency projects that heightened government expenditure, particularly in the run-up to the December 2024 general elections, will play a significant role in stimulating economic growth.
Moreover, Fitch anticipates a moderation in inflation due to statistical base effects and enhanced exchange rate stability, which are expected to bolster purchasing power, thereby driving household spending.
However, Fitch cautions that escalating consumer imports may dampen the contribution of net exports to overall growth, implying that a return to pre-pandemic growth rates, averaging 5.3%, may not be achieved in 2024.