Prompt Title: Debt analysis

Based on the information provided by the Bank of Ghana, it can be seen that the Ghanaian economy faced significant challenges in 2009 due to inflationary pressures and a surge in government expenditures in 2008. These challenges widened the fiscal and current account deficits, leading to volatility in the foreign exchange market and loss of international reserves.

To address these challenges, the Monetary Policy Committee (MPC) raised the policy rate from 17 per cent to 18.5 per cent in February 2009 to withdraw liquidity from the economy, re-anchor inflationary expectations, and complement the tightening of the fiscal stance.

Fiscal management in 2009 was also challenging due to expenditure arrears from 2008. The government restrained expenditures to GH¢8,248.2 million (38.1% of GDP), lower than the budgeted sum of GH¢8,836.6 million (40.9 % of GDP). Both recurrent and capital expenditures were within the budgeted levels, despite an overrun in the wage bill by 1.4 per cent of GDP and domestic interest payment by 0.7 per cent of GDP.

The stock of domestic debt (including revaluation stocks) rose by GH¢1,283.0 million to end the year at GH¢6,083.2 million (28.1% of GDP). The growth in the debt stock reflected mainly in the Short-Term securities, which increased by GH¢620.5 million, while that of the medium and long-term