ISSER highlights economic growth amid persistent hardships

The Institute of Statistical, Social, and Economic Research (ISSER) has assessed Ghana’s 2024 Mid-Year Budget, noting a promising economic outlook while acknowledging significant hardships faced by Ghanaians.
Despite reported economic growth, ISSER highlights increased food prices, transportation costs, and rising cement and fuel prices as major contributors to growing economic hardship, as evidenced by Afrobarometer surveys from the first quarter of 2024.

Economic growth and public expectations
The Mid-Year Budget reported a Real GDP growth of 4.7% for the first quarter of 2024, surpassing the revised annual target of 3.1%.
However, non-oil Real GDP growth showed a slight decline from 3.8% in 2023 to 3.3%.
The industrial sector demonstrated significant growth, with a 6.8% increase compared to a 2.2% contraction in the same period in 2023.
Despite these positive figures, ISSER points out that most Ghanaians expect economic growth to translate into reduced youth unemployment and lower living costs.
The Institute emphasizes the necessity of converting these growth figures into tangible improvements in living standards.

Macroeconomic stability and challenges
ISSER acknowledges the government’s efforts to navigate within the context of an IMF programme and ongoing debt rescheduling negotiations.
The report noted the achievement of a stable primary balance with a targeted surplus of 0.5% of GDP, consistent with IMF-supported objectives.
Ghana’s gross international reserves improved, covering 3.1 months of imports by June 2024, reflecting a more stable external sector despite global economic challenges.
However, ISSER emphasizes that inflation and exchange rate stabilization remain significant challenges.
Persistent price increases for essential goods and services continue to strain households, indicating the need for more robust measures to curb inflation and stabilize prices in the long term.

Private sector growth and financial accessibility
Creating an enabling environment for the private sector was a key expectation from the 2024 budget.
While the government has taken steps to improve macroeconomic stability, ISSER stresses that more needs to be done to foster private sector growth.
High interest rates and limited access to credit remain major obstacles for businesses, particularly small and medium-sized enterprises (SMEs).
ISSER calls for targeted interventions to support entrepreneurship, innovation, and investment in critical sectors.
The ISSER report highlighted the complex landscape of Ghana’s economy in 2024.
While there are promising signs of economic growth and macroeconomic stability, the persistent hardships faced by ordinary Ghanaians due to rising living costs underscore the need for more comprehensive measures.
Addressing inflation, stabilizing prices, and fostering private sector growth through improved financial accessibility and targeted interventions are crucial for translating economic growth into tangible improvements in living standards.