Fitch Solutions predicts tougher times for Ghanaian economy in 2023

Research and investment advisory firm, Fitch Solutions, is projecting tougher times for the Ghanaian economy in 2023.

According to the UK based firm, the government will have to significantly cut capital expenditure or impose new taxes to boost revenue in order to address the financial challenges in the economy.

This it believes will help narrow the financial gap and create fiscal space going forward.

“Expenditure has risen and this is driven by interest expenditure. Ghana took a lot of expensive debt and continue to borrow during the pandemic and this means interest payment are very elevated now”.

“They account for about 55% of total government fiscal intake, keeping expenditure elevated. Given the rigid nature of the Ghana’s expenditure profile, the government cannot easily reform spending resulting in those wide fiscal deficit”, it stressed

Fitch Solutions further explained that “the government has really two option at the moment to improve fiscal position; either capital expenditure or significantly increasing the countries tax base”

It mentioned that both actions will inflict some economic pains, adding “so they are no easy choices for the government”.

Source: JoyNews