Taking back 1% of GDP in 2027 won’t harm economy – Ato Forson

Finance Minister Dr Cassiel Ato Forson defended plans to take back 1% of GDP in fiscal savings in 2027, arguing the government exceeded its earlier primary surplus target to restore economic stability. Speaking in an interview on Thursday after presenting the 2027 Budget to Parliament, he said the adjustment would not undermine the economy. “So we saved 1% of GDP.

Taking back 1% in 2027 would not harm the economy.” Dr Forson said Parliament had approved a primary surplus target of 1.5% of GDP for 2025. However, the government delivered 2.5%, exceeding the target by one percentage point. “In 2025, the anchor, as approved by Parliament, was for me to do 1.5% of GDP primary surplus. I did 2.5% of GDP, and I said to the world that that is our down payment for policy credibility.” His explanation followed a question about whether reducing the fiscal buffer would require greater discipline over the next few years.

The minister argued that the government had deliberately done more than required to stabilise the economy. He described the approach as shock therapy, saying the measures had accelerated the recovery. “We could do that in two years because of the measure, the menu of measures we had to push into the economy to restore stability that has been done.” Dr Forson said the next challenge was to address youth unemployment through structural changes to the economy.

He put the number of young Ghanaians not in employment, education, or training at 1.34 million, warning that continued inaction could deepen the problem. “This is a bomb waiting to explode.” He projected that the number could rise to about 1.7 million over the next four years if no action was taken. The minister presented the government’s New Economy agenda as its response to that risk.

He said it would target investment in eight areas that can generate employment. “Our approach is to use this new economy to change the structure of the economy and invest in eight areas. This is where the jobs are.” His defence of the planned fiscal adjustment centred on the need to build on stabilisation by directing investment towards economic transformation and employment.