Ghana’s Current Account Deficit to Decline to 4% in 2023 – Fitch Solutions.
Fitch Solutions has projected a positive impact on the value of the Ghana cedi due to the anticipated narrow current account deficit of 4.0% of Gross Domestic Product (GDP) for the country in 2023, compared to 4.4% recorded in 2022.
However, this projection is dependent on the improvement of the country’s fiscal position through prudent spending, sustainable debt levels and significant revenue growth.
Although Ghana has been recording a trade surplus since 2023, capital flight caused by high-interest payments and sell-offs of the country’s bonds by foreign investors has led to a weak current account position.
Senior Country Risk Analyst at Fitch Solutions, Mike Kruninger, attributes the projected improvement in the current account deficit to the healthy production growth of Ghana’s prominent exports – gold, oil, and cocoa.
Kruninger further notes that the country had a trade surplus of $1.036 billion, equivalent to 1.5% of GDP as of October 2022. Total exports for the first 10 months of 2021 were estimated at $12.21 billion, while total imports were estimated at $11.17 billion.
The analyst expects weak import growth due to slowing domestic demand caused by high prices of goods and services as well as elevated taxes. This, in turn, will improve the overall trade balance of the country.