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“Possible election-induced fiscal overruns may induce inflationary pressures and slow the disinflation process. The budgeted increase in capital expenditure from GH¢20.44 billion in 2023 to GH¢28.70 billion in 2024 will likely stimulate price pressures as the government could overrun the programmed amount during this election year”.
The government is also expected to raise more than 50.0% of the GH¢61.9 billion budget deficit through treasury bills.
“We believe improving liquidity levels in the money market and yield expectations will augur well for corporate issuance in 2024. We expect corporate insurance will present competitive opportunities to investors seeking to diversify investment portfolios from longer-dated GoG [Government of Ghana] securities”, Databank Research added.
Analysts believe bond market activity could remain sluggish as investors seek to snap returns on the money market amid declining treasury bill yields.