Government has revised down key macroeconomic targets, including lowering 2017 budget deficit to 6.3% of Gross Domestic Product (GDP) from 6.5%, a clear indication of the government commitment to fiscal consolidation.

This means the budget deficit will be closed by a further 0.2 percent by reducing expenditures by 1.1% of GDP, mostly through cuts to capital expenditure and transfers to state agencies.

GH¢400m cut in Fiscal balance

As result, overall fiscal balance is expected to improve from a deficit of GH¢13.2 billion to GH¢12.8 billion, representing a reduction of GH¢400 million.

Finance Minister, Ken Ofori-Atta, announced the revised figures in mid-year fiscal policy review presented to Parliament yesterday.

Govt cut expenditure by GH¢2.2bn

He told Parliament that government has cut down total expenditure by GH¢2.2 billion from GH¢58.1 billion to GH¢55.9 billion.

GH¢1.4bn drop in revenues and grants

He explained that total revenues and grants for this year are expected to come in 0.9 percent of GDP at GH¢43.1 billion ($9.80 billion), less than previously anticipated GH¢44.5 billion due to falls in non-oil tax revenue and related expenditures.

6.3% unchanged

He noted that GDP growth will remain unchanged from a previous estimate of 6.3 percent, compared with 3.5 percent in 2016, which was the lowest in 15 years.

Key revisions to expenditures include:

GH¢553.2m reduction in total transfers

Ofori-Atta announced cut GH¢553.2 million reduction in total transfers to other Government Units, which comprise all statutory and earmarked funds, representing 0.3 percent of GDP

GH¢683m cut in capital expenditure

According to him, capital expenditure has been slashed by GH¢683 million representing 0.3 percent of GDP.

Surplus reduced to 0.2% of GDP

The Finance Minister announced that primary balance has been revised from a surplus of 0.4% of GDP to a surplus of 0.2% of GDP

GH¢202.01b nominal GDP

He stated that nominal GDP has also been revised slightly down to GH¢202.01 billion from the original projection of GH¢203.41 billion;

According to him, non-oil GDP growth rate was maintained at 4.6 percent, end-year inflation rate maintained at 11.2 percent and Gross Foreign Assets to cover at least 3 months of imports of goods and services, same as originally programmed.

Public Debt hits GH¢138.5 as at end of June

Ofori-Atta revealed that the provisional gross public debt stock stood at GH¢138.5 billion ($31.7 billion) as at end June 2017

The domestic component of the debt GH¢74.6 billion (US$ 17.1 billion) while the external debt hit GH¢63.9 billion (US$ 14.6 billion)

Provisional Fiscal Performance January-June

GH¢3bn shortage in revenue and grants

He explained 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)
The Finance Minister said total expenditure, including payments for the clearance of arrears amounted to GH¢23 billion (11.3 percent of GDP), against a target of GH¢27.6 billion (13.6 percent of GDP).

GH¢6.8bn on wages and salaries

Ofori-Atta said wages and salaries amounted to GH¢6.8 billion (3.4 percent of GDP) against a target of GH¢6.9 billion.

GH¢854.6m

He said 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).

GH¢6.7 for Interest payments

He stated 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).

GH¢5billion less spent on Capital Expenditure

He noted that Capital Expenditure 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.

Govt to clear all arrears by end 2019

He stated that government plans 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 would prevent the accumulation of new ones.

GH¢5.6bn fiscal deficit on cash basis

The 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.