In the face of these challenges the visiting IMF country assessment team observed that earmarking of revenues for statutory funds continues to reduce budgetary flexibility.
These were contained in a release issued here on Thursday at the end of the two-week review visit by the IMF team led by Joel Toujas-Bernate, between October 21 and November 5.
Ghana entered into an IMF country support program last April to redeem the country from crippling economic challenges triggered by a 10.8 percent fiscal slippage in 2012.
“Implementation of the program has so far been satisfactory with all end-August 2015 performance criteria met,” the statement said.
This is the second assessment being carried out by the IMF after the inception of the program.
The team held meetings with President John Dramani Mahama; Finance Minister Seth Terkper; Bank of Ghana Governor Henry Kofi Wampah; Dr. Kwesi Botchwey, Chairman of the National Development Planning Commission; other senior officials; and the donor community.
In spite of the foreseen challenges, the team was satisfied that the government, during its discussions with the IMF mission had outlined a well prepared package of revenue and spending measures for the 2016 budget to bring the fiscal deficit down to 5.3 percent of GDP next year, instead of 5.8 percent envisaged in the program.
It said steps to contain losses in state owned enterprises will also be particularly important to prevent additional fiscal pressures on the country.
Despite a difficult global environment, the mission assessed economic outcomes in Ghana’s implementation as broadly as anticipated, with growth estimated at around 4 percent during the first half of the year and inflation at around 17 percent.
The Ghana Statistical Service revised growth to 4.1 percent at the end of the second quarter.
Ghana stands to receive another injection of 116 million dollars of program support from the fund if the IMF Executive Board considers the review by the end of the year after finalization of the required documentation.
“Further fiscal adjustment along with tight monetary policy should help to restore macroeconomic stability,” the statement added.
It expected the Bank of Ghana to remain committed to adjusting the monetary policy stance, as a build-up on its recent progress to improve the effectiveness of its inflation targeting framework, which is necessary, to bring inflation down toward its medium-term objective. Enditem