S&P downgrades Ghana one notch over high fiscal deficit

 

Standard & Poor's downgraded Ghana's sovereign rating by one notch on Friday citing concerns about the cost of financing the country's high fiscal deficit and doubts about whether the government can reduce it quickly enough.

The decision to lower the rating to "B-" with a stable outlook from "B" with a negative outlook appears to contradict government comments about the impact of a possible deal with the International Monetary Fund to stabilize the economy.

Finance Minister Seth Terkper told Reuters the decision was a surprise and does not reflect government progress in stabilizing the macro economy or prospects for the IMF deal.

Ghana's economy has grown rapidly in recent years through exports of gold, cocoa and oil but the 2014 forecast is weighed down by fiscal problems such as rising inflation, a currency that has fallen sharply and a budget deficit above 10 percent.