IMF Bail Out: US Economist Steve Hanke Predicts Financial Programme Will Not Save Ghana's Economy

IMF Bail Out: US Economist Steve Hanke Predicts Financial Programme Will Not Save Ghana's Economy

  • A renowned economics professor has predicted that Ghana's turn to the IMF for economic assistance will fail
  • Professor Steve Hanke said just like the previous times that Ghana has gone to the IMF for bail out the current attempt will also fail
  • Prof Hanke is renowned for his unique way of calculating what many call "true inflation" of countries across the world

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A surprise decision by the government of Ghana to turn to the International Monetary Fund (IMF) for bailout will fail, according to a US economics professor, Steve Hanke.

L-R: Finance Minister Ken Ofori-Atta and Economist Professor Steve Hanke
L-R: Finance Minister Ken Ofori-Atta and Economist Professor Steve Hanke. Source: Getty Images
Source: Getty Images

According to the international economist at the John Hopkins University, USA, Ghana's request for financial assistance from the IMF to correct balance of payment distortions not will help the troubled economy.

"Today, I measure inflation in Ghana at a stunning 49.35%/yr. In a last ditch effort, the govt. has begun negotiations w/ the IMF on a bailout deal. SPOILER ALERT: Another IMF loan won't save GHA's economy. Like its past 17 IMF programs, a new one will fail," he tweeted over the weekend.

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Prof Hanke, whose global inflation dashboard is renowned for exposing hidden figures worldwide, has repeatedly suggested that Ghana's inflation figures were being under-reported.

On Sunday, July 3, he tweeted that Ghana ranked 9th worldwide for high inflation.

"On June 30, I measured Ghana's #inflation at a stunning 49%/yr-almost 2x the official inflation rate of 28%/yr," he said.

Prof Hanke's inflation measurements are made by the Johns Hopkins‐​Cato Institute Troubled Currencies Project (TCP), which he directs.

"We employ high-frequency data that allow for the daily measurements of both monthly and annual inflation rates. We measure. We do not forecast," Prof Hanke has explained how his inflation figures are calculated.

President directs finance minister to engage IMF for economic programme

YEN.com.gh reported previously that President Nana Akufo-Addo directed Finance Minister Ken Ofori-Atta to begin formal engagements with the IMF for an economic programme.

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Ofori-Atta should not be negotiating IMF bailout for Ghana – Isaac Adongo

The global economic disruption triggered by the Russia-Ukraine war has worsened Ghana's macroeconomy. High public debt, rising inflation and depleting foreign reserves have destabilised the balance of payment.

Economic hardship in Ghana has remained a topical national issue since the start of 2022.

Many say the move to the IMF was a surprise U-turn because government had vehemently ruled out a possible bail out programme to stabilise the economy.

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Source: YEN.com.gh

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