Expectations from Ghana’s mid-year budget review

Ghana's finance minister is gearing up to present the country's mid-year budget review and supplementary budget to parliament, as the Monetary Policy Committee (MPC) of the Bank of Ghana prepares to make an important decision. Collins Appiah, Economic Advisor at Services Integrity Savings and Loans, shared insights on the upcoming events in a recent interview with CNBC Africa. The key theme of the discussion centered around the expectations from Ghana's mid-year budget review and the potential impacts on the economy. Here are the key points from the interview: The MPC's Decision: Appiah discussed the factors that the Bank of Ghana considers in its decision-making process regarding monetary policy. He highlighted that inflation rates have been within the bank's targets for the past year, with a noticeable decline since April. Given the current challenges facing Ghana's energy sector, Appiah suggested that the bank may choose to maintain the policy rate at its current level to avoid further economic instability. Appiah cautioned against lowering the rate, citing potential risks to inflation and the economy's overall health. Finance Minister's Presentation: Appiah also touched on the anticipated focus of the finance minister's mid-year budget review, specifically addressing the liquidity crisis in the energy sector. He emphasized the importance of addressing the challenges in the energy sector due to its significant impact on the overall economy. Appiah expected the finance minister to assure parliament that the government is taking steps to address the liquidity crisis and implement solutions to stabilize the sector. Stock Market Expectations: Appiah highlighted the slow start of Ghana's stock market in comparison to previous years, attributing this trend to developments in the banking sector. He expressed optimism for the second half of the year, anticipating that increased confidence in the banking sector could drive market growth. Appiah pointed out that strong performances in certain sectors could contribute to market momentum in the coming months. Currency Stability: Appiah noted the stability of Ghana's currency, the cedi, in the first half of the year. He emphasized the importance of currency stability in guiding the MPC's decision on monetary policy. Appiah predicted that the cedi would remain stable in the near term, with potential fluctuations later in the year due to increased demand for foreign currency. As Ghana prepares for its mid-year budget review and the MPC's decision, stakeholders are closely monitoring the country's economic indicators and policy responses to navigate the challenges posed by the energy sector and other economic factors. The government's strategies to address these challenges and stimulate growth will play a crucial role in shaping Ghana's economic trajectory in the months ahead.