Economic growth is now projected at 1.2%, he said. That compares with a government estimate of 1.5% at the end of March and with an initial forecast of more than four times that.
“We had expected 6.8% GDP growth and now we realize there is going to be a steep drop,” said Ofori-Atta. “The deficit, which we had jealously guarded and kept under 5%, is now expected to widen north of 10%.”
The virus has brought an abrupt end to three years of GDP expansion of 6% or more and reversed some of the fiscal gains made under an International Monetary Fund program that ended in April 2019, Ghana’s 16th bailout-plan from the Washington-based lender. Lower-than-expected oil receipts account for the biggest hit to the economy while measures to slow the spread of the virus, such as a 21-day lockdown of the biggest cities and other containment measures, are weighing on tax revenue.
In April, the IMF approved a disbursement of about $1 billion to help Ghana address “the urgent fiscal and balance of payments needs” that the country is facing. Ghana has confirmed more than 20,000 cases and 122 deaths since its first detection of the virus on March 12.