Editorial : Macroeconomic stability must be pursued with vigour going forward

The passage of outstanding revenue bills by Parliament remains critical to government programmes as well as to enable the state to complete four of the five agreed prior actions in the International Monetary Fund (IMF) Staff Level Agreemen
Ken Ofori Atta

Now that the euphoria is dying down after a gruelling electoral battle and a winner has been declared, the incoming administration has to focus on stabilising the economy, improving domestic revenue mobilisation, reducing public debt, and ensuring private sector growth.

Projections put end of year GDP growth at 1.9 percent against a pre-pandemic target of 6.8 percent; public debt is now 71 percent of GDP and projected to hit 77 percent by end of the year; and the private sector is reeling under pressure from the pandemic, as many businesses have not recovered their losses.

Also, due to the pandemic’s impact on productive sectors of the economy, total revenue and grants have been revised to 13.9 percent of GDP in 2020 – representing a 20-percentage point decrease over the original 2020 budget target.

Agriculture and industry should be among the focal areas. The private sector’s revival should ensure that the cost of doing business is relatively low, and issues with debt to GDP must be tackled holistically -especially as we have reached the threshold.

With regard to the monetary sector, we should continue to pursue lower interest rates, price stability, a stable exchange rate and inflation-targetting.

Hence, government must focus on ensuring macroeconomic stability and promoting private sector businesses to revive the economy. The COVID-19 pandemic’s impact on the economy is a global phenomenon, but we sincerely believe that to overcome the challenges it brought with it, government must make these four areas priorities if the economy is to see better growth than that recorded before the pandemic’s emergence.

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