The Ghanaian economy is expected to receive budgetary support next month from the World Bank and the International Monetary Fund (IMF) to shore up its finances, Finance Minister Kwabena Duffuor has said.

"Recent negotiations with the multilateral institutions will see an inflow of 1.2 billion dollars (858 million euros) budgetary and project support from the World Bank and possibly one billion dollars from the IMF for balance of payments support," Duffuor told reporters.

He said the nation's budget deficit stood at 429.5 million dollars in the first quarter of this year, lower than 801.1 million dollars a year ago.

"The first five months of 2009 have witnessed a positive primary fiscal balance, gradual stabilisation of the cedi (national currency) exchange rate, a sound, well-capitalised and fairly liquid financial sector," he said.

Inflation had dropped marginally to 20.06 percent in May from 20.56 percent in April, the first fall in nine months, he added.

But it was expected to pick up next month because of a recent hike in the prices of petrol.

The 30-percent price hike, which took effect from June 5, followed global fuel price increases, officials said.

"This notwithstanding, Ghana will hit a single digit inflation (rate) next year," the minister told reporters on Wednesday.

Ghana is the world's second largest cocoa producer after neighbouring Ivory Coast and Africa's second laergest gold producer after South Africa. The west African country has been struggling with budget deficits and trade imbalances after the cost of food and fuel imports surged to record highs last year.

The budget deficit stood at a provisional 14.9 percent of Gross Domestic Product (GDP) in 2008, but President John Atta-Mills has announced plans to reduce the deficit to 9.4 percent of GDP by the end of this year. Copyright © 2009 AFP. All rights reserved. More »