Government’s spending cuts are cooling economy and squeezing demand – Bokpin

Economics professor Godfred Alufar Bokpin has warned that the government's heavy reliance on spending cuts is negatively impacting the economy and reducing demand. While speaking on Joy News' PM Express, he explained that this approach is effective in restoring macroeconomic stability and curbing inflation, but the benefits are not immediately felt by ordinary Ghanaians.

Bokpin's concerns arise ahead of the 2027 Budget presentation, where the government plans to shift towards investment, job creation, and higher incomes. The opposition has raised questions about financing this agenda, citing weak sales and the disparity between falling inflation and rising household living costs. Despite these criticisms, Bokpin commended the government's efforts in restoring macroeconomic stability, highlighting improvements in falling inflation, interest rates, reserve accumulation, and the cedi's resilience.

However, he cautioned that these gains may not have an immediate positive impact on the lives of Ghanaians due to the time it takes for such changes to filter through.