The cedi depreciated by 22.7% in 1997 in spite of the government's efforts to trim it down from the previous year's 16% deprecation rate. Inspite of the tight monetary policies in 1997, the monetary authorities had a lot of difficulty in reducing the growth in money supply. Money supply grew by 39.5% in 1997 a slight increase from the 39.4% rate in the previous year. The main thrust of the 1998 budget was directed at strengthening budgetary discipline and increasing savings.
In line with government's medium term objectives, the macroeconomics targets projected for 1998 are as follows : · A real GDP growth rate of 5.6%. · An end-of-period rate of inflation of 9.5%. · An overall broad budget deficit equivalent to 5.8% of GDP. · A primary budget surplus equivalent to 4% of GDP.
Overall balance of payment surplus $80 million. To be able to achieve these objectives we are of the opinion that government should adopt measures that will slow down the growth in state expenditure and pursue policies that will expand revenue during the year.
The continuing but gradual improvement in the economy over the last couple of years will provide the impetus that is needed to attract more Foreign Direct Investment into the country.
1995 1996 1997 1998* Real GDP Growth (%) 4.5 5.2 5.1 5.6 Inflation: Annuak Average (%) 59.5 46.5 27.9 15.0 End-of-Period (%) 70.8 32.7 20.8 9.5 Merchandise Exports(fob) US$M 1,431 1,571 1,481 1,625 Merchandise Imports (fob) US$M 1,688 1,937 1,753 1,978 Trade Balance US$M (256) (366) (272) (354) Current Account(including official transfer)US$M -143.7 -322.7 (213.8) -311.1 Capital Account US$M 459 286 239 391 Overall Balance US$M 249 (19) 25 80 Source: Bank of Ghana