Minister of Finance, Seth Terkper has said that the Ghanaian economy is showing signs of recovery.
The economy has for the past two years experienced major instability amid a very high inflation, a depreciating cedi, high budget deficit and a ballooning wage bill among others.
The situation forced Ghana to seek support from the International Monetary fund (IMF).
Seth Terkper speaking on the Citi Breakfast show said stakeholders must consider the recent appreciation of the Cedi against the major trading currencies, as a key sign of recovery.
Within the past four weeks, the Cedi has seen some significant recovery on the foreign exchange market now exchanging at about GH˘3.30 from rates as high GH˘3.80 reported a couple of months back.
“As I just indicated cocoa prices are recovering. I think we know the reasons why we missed the targets, but we are very hopeful that the economy has started a turn around. The best indicator of that is the value of the cedi”, he said.
According to him, “The reason inflation has gone up is as a result of two corrections that have to be made. Most importantly adjustment in the petroleum and utility prices in order that we stay down the subsidies which we have been accumulating. Secondly the fast depreciation of the cedi which something to do (beside the BoG measures) the fall in the prices of cocoa and gold.”
Meanwhile, the IMF however believes growth will decelerate to 4 ˝ percent, from the 7.1 percent in 2013, and the year will end with an average inflation of around 15 percent.
This was contained in IMF’s press release after completing first round of talks with government over a possible programme which is expected to be rolled out from January 2015.
According to the fund the external current account deficit is projected to narrow to 10 percent of GDP, as imports declined substantially due to slower growth and a large depreciation of the currency, while export performance remained weak.
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