Accra, Aug. 18, GNA - The Ministry of Finance and Economic Planning on Thursday released the 2005 Mid-Year Fiscal Report on the economy in which it said total overall revenue and grants for the period fell below target by 1,193.4 billion cedis.

Government pegged its total receipts of revenue and grants for the first half of the year at 13,310.1 billion cedis but received 12,116.7 billion cedis.

The Report from the Ministry and issued to the media in Accra said the shortfall of 1,193.4 billion cedis was as a result of unrealised non-tax revenue and external grant inflows.

The Report gave a breakdown of total receipts against the shortfalls and said tax revenues for the period was 9,160.4 billion cedis with a shortfall of 144.4 billion cedis. The Government had targeted 9,304.8 billion cedis.

The total receipt from tax revenue represented 91.5 per cent of the total revenue outturn for the period under review. Value Added Tax receipts totalled 2,400.4 billion cedis as against a target of 2,598.8 billion cedis indicating a shortfall of 198.4 billion cedis.

The Report said provisional outturn for non-tax revenue for the first half of the year fixed at 328.6 billion cedis, which represented a 50 per cent under-performance of the targeted 739.6 billion cedis. Total disbursed funds from grants were 2,105.7 billion cedis, the Report said and gave a breakdown of sources as follows: HIPC Assistance from multi-laterals 830.4 billion cedis, Programme Grants 406.3 billion cedis and project grants 869 billion cedis.

The sources of the total disbursed funds also fell short of expectations with programme and project grants being lower by 199 billion cedis and 609 billion cedis, respectively. HIPC assistance, however, exceeded target by 250 billion cedis.

For direct taxes which included PAYE and company taxes, the Government received an amount of 2,759 billion cedis against a target of 2,517.1 billion cedis indicating an over performance of 241.9 billion cedis accruing on the back of strong performance in company taxes. Total expenditure excluding arrears clearance and the float was below target by 1,639.5 billion cedis.

The Report said overall budget balance showed a deficit of 1,458.2 billion cedis representing 1.5 per cent of GDP against a target deficit of 836.5 billion cedis, equivalent of 0.9 per cent of GDP. Domestic primary balance recorded a surplus of 1.03 per cent of GDP as against a target of 1.66 per cent of GDP.

Total net domestic borrowing fixed at 1,215.3 billion cedis against the programmed repayment of 237.3 billion cedis.

The Report said overall budget balance showed a deficit of 1,458.2 billion cedis representing 1.5 per cent of GDP against a target deficit of 836.5 billion cedis, equivalent of 0.9 per cent of GDP. Domestic primary balance recorded a surplus of 1.03 per cent of GDP as against a target of 1.66 per cent of GDP.

Total net domestic borrowing fixed at 1,215.3 billion cedis against the programmed repayment of 237.3 billion cedis.

The Report said total payments for the first half of the year were pegged at 15,618.7 billion cedis but the provisional outturn for the period fixed at 14,571.5 billion cedis. This indicated an under-expenditure of 1,047.2 billion cedis.

On breakdown of the payments, the Report said statutory payments amounted to 5,789.6 billion cedis against the programmed 5,737.9 billion cedis while discretionary payments amounted to 9,782 billion cedis against the estimated 9,880.8 billion cedis.

The Report said the economic performance for the period had remained resilient against the backdrop of increasing crude oil prices. "There have been some marked successes in the areas of inflation, exchange rate and interest rate developments."

The Rreport said the delayed and slow inflow of external development and budgetary assistance had negatively impacted on the overall fiscal performance but noted that cautious policies had contributed to the general macroeconomics stability for the half year.

The 2005 budget statement and economic policy of the government set key macro economic targets as: Real GDP growth of at least 5.8 per cent; bringing the 12-month consumer price index (CPI) inflation down to 13.5 per cent by the end of December 2005; and a single digit in 2006. The budget statement also set to maintain the build-up in gross international reserves at four months of import cover; achieve a domestic primary surplus of 2.4 per cent of GDP and bring the overall budget deficit to the equivalent of 2.7 per cent of GDP.