ACCRA: Higher-than-expected wage claims and fuel subsidies will mean Ghana must take additional steps to stick to its 2012 deficit target of 5.2 percent of non-oil gross domestic product, the International Monetary Fund said.
The government of President John Atta Mills, who is seeking a second term in December, recently agreed an 18 percent pay increase for public sector workers and will be under pressure to meet rising world oil prices with fuel subsidies.
"To this end, discussions focused on identifying opportunities for fiscal savings from higher revenues or reduced spending including contingency measures that could be activated if needed," IMF mission chief Christina Daseking said in a statement after a nine-day visit to the country.
The Fund predicted 2012 growth of 8-9 percent, roughly in line with analyst expectations, and inflation at between 6.7 and 10.7 percent.
"Nevertheless, Ghana's economy is exposed to upside risks to inflation from currency depreciation and high domestic demand," it said, noting "further policy actions" by the Bank of Ghana may be needed after last month's 100 bp hike to 13.5 percent.
"It (the IMF mission) encouraged the Bank of Ghana to continue to build a strong buffer in foreign reserves and take measures to increase the liquidity in the foreign exchange market as a way to reduce excessive exchange rate volatility."
Ghana saw growth of 13.5 percent in 2011, helped by the start of commercial oil production, and managed to keep inflation just under its 2011 target of nine percent.
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