Ghana’s budget deficit is forecast to reach 8 percent of Gross Domestic Product (GDP) this year as government spending in the fourth quarter of the year accelerates, Dr. Kwabena Duffuor, Minister of Finance and Economic Planning has said.

The shortfall will narrow to 3.5 percent of GDP over the medium-term as the government manages spending and revenue collection, Dr Duffuor noted. “Ghana has largely achieved fiscal consolidation since the budget deficit was brought down to 9.7 percent of GDP last year from 14.5 percent in 2008,” he said.

The 2010 deficit was earlier projected at 7.5 percent, Dr. Duffuor said, declining to disclose which areas would record increases in government spending. Growth will soar to 20 percent in 2011 from about 6.5 percent this year as oil production in the country’s nascent energy industry begins, Duffuor said.

Ghana expects to pump 120,000 barrels of crude per day from its offshore Jubilee Oilfield by 2011, Ato Ahwoi, Chairman of the Ghana National Petroleum Corporation (GNPC) said.

Stability in the domestic currency, the cedi is likely to continue supported by growth of its international reserves to $4 billion by early 2011 from $3.3 billion recorded in June, Dr Duffuor said.

The cedi has gained 4.5 percent against the U.S. dollar since July 2009 helping to reduce inflation from a five-year high of 20.7 percent recorded in June last year to 9.44 percent in August.