Debt Ratio In Ghana

818 Words 4 Pages
I think the Debt/GDP ratio could be slightly higher as election years have always seen a reduced growth forecast even for nominal GDP. However, at that debt level, even though in practice it is difficult to determine what a “safe” debt level, the macroeconomic environment points to the fact that our fiscal space (maximum debt threshold) is almost running out. Therefore Ghana will be faced with severe debt sustainability risk with the rising debt levels. With the slow real GDP growth, low revenues and high interest rates, we cannot allow the debt ratio to reduce progressively through growth neither paying it down deliberately with short term securities. Even though government may have accumulated the debt for “good” reasons, it poses a severe …show more content…
This can hold if only the spending-multiplier effect is higher on growth, interest rate is minimal and the said investment is supper-efficient and not like building public toilets and schools. Even in the develop world, many countries are abolishing such set of middle-of-the-road assumptions in guiding fiscal policy. With our fiscal distress and macroeconomic instability, we cannot take any chances on going on borrowing spree no matter how large the need may be especially during an election …show more content…
Which sectors is government spending on—how much is being spent on transportation, public infrastructure, and health care? How much of the expenditure is temporal and permanent? How “clever” are these investments? Is government spending using indicators from the various sectors of the economy? Which of the spending was meant to offset another factor likely to affect output? What is the magnitude of the impact (multiplier effect) of the changes in spending meant for budget consolidation and structural purposes on macroeconomic indicators such as consumption, employment, inflation, investment and exports? What’s the social benefit payoff per cedi spent by

Related Documents