Economic stability would come at a great cost - Economist

Economist Dr. Godfred Bokpin has warned the economic stability the country is beginning to experience would come at a great cost.

“There are somethings the country is giving up in order to have this. We are tightening liquidity, tightening monetary policy and the rest”, he said on business analysis programme Business Trends on Wednesday.

Ghana’s decision to sign onto an IMF credit facility means that the country has to make sacrifices or squeeze itself - from public sector workers and fiscal retrenchment targets to tightened monetary policies - in order to get the desired results.

However Dr. Bokpin told host George Wiafe that by tightening monetary policies the country is denying the private sector growth opportunities in terms of ability to access credit.

He suggests the way to go is for the policy rate to be lowered to stimulate demand for credit and subsequently bolster economic activity.

Dr. Bokpin warned in the short-term the country was giving up growth.

“And we know that output volatility has an implication for consumption volatility. It has implication for income inequality and it has implication for poverty reduction”, he stated.

Another real threat to the economy he pointed out was the power crisis which remains unresolved.