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

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

Language

English

In AGRIS since: 2016-03-15

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Ghana Economic Update, October 2014

2014

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