Mr Seth Terkper on Friday said based on the revenue and expenditure estimates, the 2016 budget would result in an overall budget deficit of GHc 8,407.7 million, equivalent to 5.3 percent of Gross Domestic Product (GDP).

He said financing of the deficit would be from both domestic and foreign sources, with Net Domestic Financing estimated at GHc 5,441.2 million, which is equivalent to 3.4 per cent of GDP, and financing from foreign sources also estimated at GHc3,398.9 million, equivalent to 2.1 percent of GDP.

Mr Terkper made these projections in the Budget Statement and Economic Policy of the Government for the 2016 financial year to Parliament in Accra.

He said GHc432.4 million, equivalent to 0.3 percent of GDP was estimated to be saved in the Ghana Petroleum Funds, the Sinking Fund and the Contingency Fund.

He said monetary policy would, however, continue to be guided by the Bank of Ghana’s (BoG) inflation targeting framework, which aims to maintain headline inflation at the midpoint of the target range (8±2 percent) in the medium term, in the context of a floating exchange rate regime.

The Minister said the BoG would continue to use the policy tools available to guide its policy decisions and strengthen its monetary policy formulation process to ensure that inflation and inflation expectations move gradually towards the target band in the medium term.

He said, in addition, the BoG would reform its monetary operations, to facilitate money market development and enhance the effectiveness of the inflation targeting framework.