Dr Ernest Addison, Governor of the Bank of Ghana says rising government expenditure and weakened revenue levels are the major threats to the swift stabilisation of the economy.
Dr Addison said this when answering questions from Journalists after the Monetary Policy Committee meeting to review the health of the economy this week.
He added that some of these concerns forced his entity to keep the policy rate at 16 percent.
This is the fourth time this year that the Monetary Policy Committee has held the rate since January 2019.
READ ALSO: Policy rate kept at 16% by BoG
The Governor noted that the Monetary Policy Committee was also worried about continued revenue weakness which requires expenditure adjustments to contain the larger than the projected budget deficit.
He was however optimistic that despite this challenge the situation would improve “full implementation of the new tax measures will likely impact revenue performance in the last quarterâ€.
This, he also believed that could help achieve the fiscal deficit target set for the year. “If the fiscal situation was better and stable we would have gone down on the policy rate†he added.
Dr Addison said we should not forget about the fact that Budget is particularly dependent on non-resident financing and we don’t want to take steps that would jeopardize the situation.
The policy rate has been kept at 16 percent by the Monetary Policy Committee of the Bank of Ghana (BoG).
READ ALSO: BoG maintaining policy rate at 16% is prudent - Consultant
Governor of the Bank of Ghana Dr Ernest Addison speaking at a press briefing on Friday, September 20, 2019, said the decision was as a result of some threats to the country’s economic growth and inflation outlook.
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