Ghana became a middle-income country in 2010. In 2011, it was the economy with the world’s highest growth rate. The economy is to a high degree based on commodity production.
Ghana’s economy is still based on commodity production and is dependent on revenues from cocoa, gold and timber. Other exports include: tuna, aluminium, manganese ore, diamonds and horticulture. With its newly acquired status as an oil producing nation, expected revenues from crude oil are projected to be the most important growth factor in the economy. In late 2010, Ghana became a lower middle income country when a new calculation basis for the country’s national accou8nts was used.
Ghana’s growth rate for 2012 is projected to grow at 7.6 percent. For 2011 when oil production started in earnest, the estimated growth was 14.4 percent. Inflation is still in single digits, registering 9.5% for July 2012. Gross International Reserves of the Bank of Ghana have however declined to US$4.3 billion as at June 8, 2012, equivalent to 2.5 months imports cover of goods and services.
Ghana’s economic goal for the medium–to-long term is to ensure sustained economic growth and development. Real GDP growth over the medium term is expected to be around 8 per cent on the average, reflecting strong expansion in both the non-oil and oil sectors of the economy. The growth forecast assumes a favourable investment climate and expanded social and economic infrastructure. Monetary policy will be geared at maintaining single-digit inflation over the medium term, and the Bank of Ghana will continue to maintain a flexible exchange rate regime designed to support Ghana’s inflation target.
Over the medium term, the balance of payments is projected to remain in surplus, reflecting high commodity export prices, oil production and exports, and continuing portfolio capital inflows. Under these circumstances, the Bank of Ghana expects to build further reserve cover to provide a larger cushion to manage potential external volatility. Fiscal deficits will be reduced to levels that can be financed in a sustainable manner without crowding out private sector credit and, with the goal of progressively reducing debt-GDP ratios over the medium term.