Ghana Economic Update, October 2014

Oppong, Felix; Aykut, Dilek; Smith, Gregory; World Bank

Ghana Economic Update, October 2014

2014

Oppong, Felix | Aykut, Dilek | Smith, Gregory | World Bank

This report is the most recent in a series aimed at monitoring economic developments in Ghana and has two sections. The first section summarizes the recent macroeconomic developments in the country while the second section presents the main findings on poverty and employment published recently by the Ghana statistical service. Ghana s overall macroeconomic conditions have deteriorated further in 2014 with large twin-deficits lingering, fueling government debt and inflation, a sharp depreciation of its currency, and a weaker pace of economic growth. The fiscal deficit remains the biggest source of vulnerability in the Ghanaian economy. Preliminary figures show the fiscal deficit was 9.2 percent of GDP in the first half of 2014, driven by the high wage bill and rising interest costs. The wage bill grew 25.7 percent (y-o-y) during the first half of 2014 despite promised measures to contain it, while interest payments reached 5% of GDP. Total domestic revenue collections were dragged down by a contraction in non-tax revenue while tax revenue only increased slightly to 15.6 percent of GDP. With large expenditures planned for the second half of the year, the deficit is projected to be around 10% of GDP, above the government s 8.8 percent target for 2014. A careful analysis of the determinants of poverty and inequality, and their interaction with labor market variables is just beginning, as the 2013 surveys were just released. However, these preliminary findings highlight how critical are Ghana s policy decisions over the next 12 months to pursue more inclusive and stable growth. Urgent efforts are needed to build a more predictable policy environment that facilitates diversification from capital intensive activities in extractive industries towards more labor and land intensive activities in the agriculture and service sectors.

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AGROVOC Keywords

agricultural sector agriculture assets balance of payments commercial banks consumer prices developing countries development policies diversification economic growth economic sectors exchange rate expenditure external debt extractive industries extreme poverty farmers food consumption food processing gold gross domestic product growth rate household income import imports inflation interest rates liquidity living standards maturity pension population growth poverty reduction public debt remittances rural areas rural communities rural population school feeding stocks unemployment

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Publisher

Washington, DC

Other Subjects

Interest expenditure; Rates of inflation; Domestic credit; Reserves; Rural; Export revenue; Portfolio; Foreign direct investment; Central bank; Capital goods; Exchange rate regime; International reserves; Life expectancy; Absolute poverty; Budget deficit; Private consumption; Household heads; Debt outstanding; Employment source; Multiple exchange rate; Poverty line; Employment opportunities; Self-employment; Monetary expansion; Return; Deposit money banks; Short term capital inflows; Coupon payment; Treasury bill rate; Current account; Current account balance; Government debt; Welfare monitoring; Treasury bill; Nominal exchange rate; Domestic debt; Treasury bond yield; Treasury bond; Interest costs; Stable growth; Coastal region; Poverty rates; Foreign capital; Consumer price inflation; Price inflation; Debt service; Credit policy; Short-term capital; Poor; Equities; Domestic banking; Poverty incidence; Poverty profile; Macroeconomic conditions; Reserve requirement; Consumer price index; Foreign assets; Livestock sector; Trade deficit; Human development; Deficits; Urban regions; National poverty line; Growth rates; Sovereign bonds; Withholding taxes; Real exchange rate; Consumption growth; Portfolio investment; Nominal wages; Consumption expenditure; Consumption basket; Treasury; Fiscal deficit; Slowdown; Open market; Extreme poverty line; Administrative regions; Reduction in poverty; Treasury note; Absolute poverty line; Basis points; Gini coefficient; Commodity prices; Trust fund; Living standard; Income inequality; Relative prices; Wage earners; Amortization; Determinants of poverty; Fixed investment; Interest payment; Price increase; Financial crisis; Interest payments; Inflationary pressure; Poverty gap index; Banking sector; Loan; Total revenue; Current account deficit; National poverty; Trade credit; Poverty levels; Import demand; Rural phenomenon; Labor force; Reserve; Eurobond; Deposit; Excise taxes; Currency; Gdp; Imbalance; Short-term instruments; Domestic borrowing; External financing; Treasury bills; Arrears; Labor market; Income on food; Poor population; Poverty gap; Poverty lines; Coupon; International standards; Debt composition; Debt stock; Unemployment rate; Capital outflow; Trading; Human development index; Gdp per capita; Open market operations; Debt issuance; Economic developments; Expenditures; World development indicators; Incidence of poverty; Consumptions; Oil exports; Capital flows; Tax; Currency depreciation; Total external debt; Shortfall; Poverty rate; Fiscal balance; Lack of education

Language

English

Type

Economic & Sector Work :: Economic Updates And Modeling

In AGRIS since: 2016-03-15

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Ghana Economic Update, October 2014

2014

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