Real sector growth has propelled the economy to keep its robustness despite external influence such as rising oil prices and the credit crunch that affected financial markets and investment inflows as well as declining valuation of equities.
According to the latest Monetary Policy Committee (MPC) of the Bank of Ghana report for the first two months of the year, the economy had remained resilient to the cost-price and balance of payments pressures emanating especially from the oil markets and significant re-alignments in the major international currencies.
Similarly the fundamentals are robust and economic activity is at an increasing pace, with relative stability in the exchange markets, Dr. Paul Acquah, Governor of the Central Bank revealed yesterday when he met financial journalists.
With regard to some macroeconomic indicators, the bank's survey of business and consumer confidence early into the year point to a positive expectation for 2008, with household and industry showing more optimism in their assessment of economic conditions and prospects.
Developments on the foreign exchange market showed that exchange market conditions remained stable and continued to grow in depth. Purchases and sales by banks and forex bureaux in the foreign exchange market for the first two months of 2008 amounted to $1.59 billion.
The country's gross international reserves at the end of February 2008 stood at $2.45 billion, a decline of $0.4 billion as at December 31, 2007, and translate on average into goods and services import cover of 2.9 months. The result is due to the increasing import bill-mostly due to the rising crude price.
Cumulatively, the Ghana cedi depreciated against all the three major foreign currencies- 0.8 percent against the U.S dollar, 0.9 percent against the pound sterling and 3.6 percent against the euro.
On the external payments front, volatility in commodity prices continued in the first two months of 2008 as crude oil and gold prices hit historical highs of $110per barrel last Tuesday and $1,007 per ounce on Friday. The overall effect of these price movements was that the economy's core terms of trade improved somewhat compared with deterioration for the same period in 2007.
While non-traditional exports amounted to $268.7 million, compared with $140.8 million for the corresponding period in 2007, total merchandise exports for January and February amounted to $1,434.7 million, higher than $1,007.7 million for the same period in 2007.
On the government budget for 2008, the initial banking data on implementation indicate a robust revenue effort, but also indications of strong growth in expenditures.
Total revenue at the end of February 2008 was GH¢619.9 million-3.8 percent of gross domestic product (GDP) compared with GH¢497.1 million a year earlier.
As total tax revenue was GH¢548.6 million, compared with GH¢468.1 million for the same period last year, non-tax revenue was GH¢30.5 million, compared with GH¢7.8 million for same period in 2007.
By Charles Nixon Yeboah