Finance Minister, Ken Ofori-Atta has announced marginal revision of the government’s fiscal deficit target from 6.5 percent of GDP to 6.3 percent.
Government has in the past spent more than has been budgeted for leading to huge deficits which puts financial burden on the economy.
Presenting the Budget Review in parliament, Mr. Ofori-Atta stated that the revision is consistent with government’s resolve to grow the economy and create jobs.
“Over all fiscal deficit has been revised downwards from 6.5 percent of GDP to 6.3 percent of GDP. Primary balance have been revised from a surplus of 0.4 percent of GDP, to a surplus of 0.2 percent of GDP and Gross Foreign Asset to cover at least three months of imports. Goods and services remain the same as originally programmed,” he explained.
Announcing some more revised data, Mr. Ofori-Atta stated that Total Revenue and Grants has been revised downwards by 0.9 percent of GDP from GH¢44.5 billion to GH¢43.1 billion.
“The revision to total Revenue and Grants emanates from revisions made to Corporate Income Tax, Import VAT, Import duty as well as the reclassification of expected non-tax revenue inflows from the sale of government shares of GH¢500 million as financing,” he explained.
In addition, the Minister noted that total Expenditure has also been revised downwards by 1.1 percent of GDP from GH¢58.1 billion to GH¢55.9 billion.
He observed that the key revisions to expenditures included; 0.4 percent of GDP (GH¢867.0 million) adjustment to Goods and Services; 0.3 percent of GDP (GH¢553.2 million) reduction in total transfers to Other Government Units, which comprise all statutory and earmarked funds; and 0.3 percent of GDP (GH¢683.0 million) adjustment to Capital expenditure.
“Despite the measures being taken to ensure that we maintain fiscal discipline, government remains strongly committed to growing the economy and delivering services to our people through strategic allocation and efficient use of resources,” he assured.
However, government has also maintained some key macroeconomic indicators such as the growth rate and inflation.
“Overall, GDP growth rate is maintained at 6.3 percent with nominal GDP revised slightly to 202 billion from the original projection of 203.41 billion. Non oil growth rate maintained 4.6 percent, end year inflation rate is maintained at 11.2 percent,” he noted.
Provisional Fiscal Performance January-June
Mr. Ofori-Atta announced that Total Revenue and Grants amounted to GH¢17.5 billion (8.6 percent of GDP) against a target of GH¢20.5 billion (10.1 percent of GDP);
“Total Expenditure, including payments for the clearance of arrears amounted to GH¢23.0 billion (11.3 percent of GDP), against a target of GH¢27.6 billion (13.6 percent of GDP). Wages and salaries amounted to GH¢6.8 billion (3.4 percent of GDP) against a target of GH¢6.9 billion,” he added.
He stated that Goods and Services amounted to GH¢854.6 million (0.4 percent of GDP) against the target of GH¢1.4 billion (0.7 percent of GDP);
He disclosed that Interest payments amounted to GH¢6.7 billion (3.3 percent of GDP) against a target of GH¢7.1 billion (3.5 percent of GDP);
“Capital Expenditure (CAPEX) amounted to GH¢2.4 billion (1.2 percent of GDP), representing 81.8 percent of the target of GH¢2.9 billion (1.4 percent of GDP) for the period·Government to eliminate all arrears by end 2019 following the outcome of an audit of the outstanding commitments generated as at end 2016 and institute stringent measures that will prevent the accumulation of new ones,” he observed.
Mr. Ofori-Atta stated that fiscal deficit on cash basis was GH¢5.6 billion (2.7 percent of GDP) compared to GH¢6.7 billion (4.0 percent of GDP) recorded in the same period in 2016;
He noted that the primary balance recorded a surplus of 0.6 percent of GDP, against a target deficit of 0.01 percent.
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By: Lawrence Segbefia/citibusinessnews.com/Ghana