Accra, 5 Sept., The Centre for Policy Analysis (CEPA), an independent economic think-tank, said today that Ghana's economic woes are rooted in its poor fiscal management which is reflected in its chronic large budget deficits. Reviewing the government's budget projections for 1997 at a business luncheon organized by the Ghana National Chamber of Commerce in Accra, Dr. Nii Noi Ashong of CEPA, said economic indicators are pointing to a sluggish or stunted growth by the end of the year. CEPA's analysis of the economic trend was set against the targets made in the government's budget statement and economic policy for 1997. The government's forecast include an end-year inflation rate of 15 per cent, an economic growth rate of 5.5 per cent, money supply to grow at 15 per cent and a balance of payments surplus of 100 million dollars. In addition, the government projected a fiscal surplus of 191 billion cedis based on a revenue growth of 30 per cent against an expenditure increase of 14 per cent. ''At the core of the 1997 programme was the implicit assumption that revenue mobilization will be vastly improved while the expenditure control and monitoring machinery will be strengthened. ''In the absence of any new explicit policy initiatives, CEPA concluded that the government was relying on the strength of its administrative machinery to deliver the promised fiscal package''. Dr. Ashong said government's projection was predicated on an assumption of a ''business as usual'' policy stance as it lacked a new clear-cut policy initiative in the financial programme. Developments of the first half-year seemed to confirm CEPA's worst fear that the year-on-year inflation rate will be hovering around 30 per cent. After hitting 31 per cent in April, Dr. Ashong said money supply growth has assumed an upward trend with year-on-year growth rate of about 35 per cent at the end of June. Dr. Ashong noted, that the economy is also characterized by a severe credit crunch. ''It is this high cost of credit which crowds out the private sector. Less obvious and more subtly, the credit crunch is also reflected in accumulation of payment arrears by the government.'' CEPA's main concern, Dr. Ashong said, is that the combination of the rising nominal interest rates triggered by the large issues of treasury bills has imposed a high burden of debt servicing on the private sector. ''Such a situation, if it persists, will likely lead to economic recession, increased unemployment, enterprise failures and bankruptcies,'' Dr. Ashong said. ''To him, these developments together with the expected rise in the inflation rate in the second half of the year would make it difficult to stabilize the cedi on the foreign exchange market and also to reduce interest rates''. Dr. Ashong said the overall poor performance in the tax effort, combined with the lower than expected international donor grant support, has put tremendous pressure on the government's ability to meet its payment obligations. Government's recourse to both bank and non-bank domestic borrowing has created a credit squeeze among the business community. On expenditures, CEPA noted a ''clear divergence between payments and commitments especially for expenditures in the non-automatic categories''. These include subventions, social security contributions, item 2-5 expenditure and development spending. ''For all these expenditure categories, fairly substantial accumulation of payment arrears have resulted. ''In the case of transfers to SSNIT, estimates of such arrears range from 14 billion cedis to 24 billion cedis,'' Dr. Ashong said. CEPA said the need to examine government revenues within the context of the overall government structure and its finances is therefore a matter of considerable concern that demands urgent national attention. Mr. Ato Ampiah, president of the GNCC, said the half-year review of the macro-economy is paramount to its members because ''as businessmen, it is important to know the direction of the economy to enable us to make prudent projections''.