Economy Is Strong Due To Prudent Policies – Duffuor

The Minister of Finance and Economic Planning, Dr. Kwabena Duffuor, says confidence in the country’s economy is now strong due to the prudent policies of the government.

He said the private sector’s responses to the macro-economic policies and structural reform programmes of the government had generally been positive over the past 14 months.Interacting with a cross-section of his ministry’s staff in Accra, Dr. Duffuor said the government recognised that the risks associated with the macro-economic in balances had the potential to seriously undermine the effort of the country to attain a middle income status by 2010.

He said the government was therefore taking steps to weed out all wasteful public spending and enhance revenue through significant improvement in tax policy.

Dr. Duffuor said his vision for the medium term was to accelerate growth of the economy without compromising macro-economic stability.

He pointed out that with the emerging oil and gas industry, the transition to petroleum producing economy represented one of the most critical tests for the country’s economic development since independence.“Barring any adverse risk factors in the outlook for the rest of the year, we anticipate better growth prospects in the second half, underscored by continued stability and gradual easing of credit conditions.”

Dr. Duffuor said the government had implemented prudent fiscal and monetary policies that had ensured fiscal sustainability and supported the domestic financial system.

Even in the face of cyclical downturn in economic activity, he said, the government had proceeded with its fiscal consolidation plains for the year.“Through a little less than two years, the distance we have travelled these few months is remarkable. The benefits of the government’s commitment to its economic programmes are clearly visible and the decline in the overall budget deficit this year is appropriate,” he said.

Dr. Duffuor said government budget finance had been improved greatly, and coupled with monetary policy, helped keep inflation low, providing a stable environment in which businesses and households could plan and undertake their economic activities.

He said disciplined economic policies had contributed to the good performance, adding that the government’s objective of reducing the fiscal deficit over the medium term was feasible and critical to achieving private sector led growth. On inflation, the minister said the implementation of policy measures had led to significant improvement in the economy, noting that the rate of inflation now is 9.3 percent, representing the 10th consecutive month of decline since it peaked at 20.7 percent in June 2009.