Business News of 2014-06-11

Fitch predicts end-of-year revenue deficit

Ratings agency, Fitch is warning that government would end the year spending more than what it has collected as revenue.

Fitch's latest report notes that the first quarter has already recorded a budget deficit of a little over 2.1 percent that was financed by the Bank of Ghana.

Fitch in its report also stated that for the third year running, the budget deficit would exceed 10 percent of the total value of the economy by December.

This prediction is bad news for government as it battles to demonstrate to its development partners and the Britton Wood institutions that it is committed to carrying out an aggressive fiscal consolidation program to check its rising debt.

The country's debt stood at GH¢56 billion as at the end April of this year. Fitch's forecast might also affect financial support from the country's donor partners who have told Joy Business that they would not release funds for Ghana unless they see that government has done enough to check its rising budget deficit.

Fitch however maintains that although the issuing the country's third Eurobond might be expensive it might go long way to stabilize the economy by easing the immediate external financing pressures.

Meanwhile government says it is committed to significantly reducing the budget deficit by the end of this year. Deputy Minister, Ato Forson, is optimistic about economic improvements citing first quarter figures as evidence.

"You can check clearly from first quarter figures that we are really doing well from the expenditure side...and it is important that we admit that", he said.

Source: myjoyonline.com
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