By Elorm Desewu @abhinaabhinav
Provisional data on the execution of the 2019 budget shows, the government has missed its fiscal deficit target for the first seven months.
According to data from the Bank of Ghana, (BoG), the government recorded a fiscal deficit of 3.9 percent of Gross Domestic Product, (GDP) against a target of 3.2 percent GDP.
The primary balance also worsened recording a deficit of 0.7 percent of GDP as against a programmed surplus of 0.1 percent of GDP.
From January to July 2019, total revenue and grants amounted to GH¢26.8 billion representing 7.7 percent of GDP compared with the envisaged target of GH¢31.8 billion which was 9.2 percent of GDP. The revenue shortfalls were mainly from international trade taxes.
Total expenditures and arrears clearance grew, in year on year terms, by 22.4 percent to GH¢40.4 billion representing 11.7 percent of GDP, marginally below the target of GH¢42.9 billion which is 12.4 percent of GDP.
According to the governor of the BoG, Dr Ernest Addison at a press conference last week, the fiscal situation remains a concern and strengthened efforts would be needed to close the deficit gap.
He said the continued revenue weakness requires expenditure adjustments to contain a larger than projected budget deficit. This, he said will help underpin investor confidence in the Ghanaian economy and reduce the burden on monetary policy.
Global conditions and inflation developments at home have created some policy space for monetary policy which, however, cannot be exploited in the current circumstances.
He said, it is expected that the full implementation of the new tax measures will likely impact revenue performance in the last quarter to help achieve the fiscal deficit target set for the year.
