A survey conducted by the Bank of Ghana (BoG) for April 2004, has indicated that there was increase in economic activity and growing business confidence in the private sector, in spite of a decline recorded a the beginning of the year.

Also it has shown that fiscal development for the first quarter of 2004, recorded a higher-than budgeted government expenditure, besides domestic revenue performance which was on track

Total government receipts for the first quarter amounted to ?4,026 billion, an increase of 17.0 per cent, above total receipts for the same period in 2003, compared to a budgeted estimate of ?4,124 billion for the first quarter of 2004. Tax revenue exceeded budged targets, whereas non-tax revenue dropped short of target. The benchmark 91-day treasury bill rate increased marginally from 17.6 per cent in February 2004 to 18.0 per cent in April 2004.

Interbank money market rates moved from 15.8per cent by February 204, to 15.3 per cent at the end of April 2004. Commercial bank base rates were kept between 25.5 per cent, and 27.0 per cent, significantly above money market rates. There now continues to be a shifting market preference in favour of long dated government maturities.

Fiscal policy is currently set on a path of continued domestic debt, reduction. Also, there is the benefit of prospective donor financial disbursements under the multi donor budget support mechanism. Ghana is scheduled to reach HIPC completion point this year and this would see a significant reduction in the external debt and the uncertainties regarding debt-service obligations.

The Monetary policy committee has decided to reduce the Bank of Ghana prime rate from 20 per cent to 18.5 per cent in view of the risks in the economic outlook and inflation.