Budget shows "signs of fiscal consolidation" - Governor

Accra, July 21, GNA - Preliminary banking data on the execution of the Government budget for the first half of the year show some signs of fiscal consolidation, Dr Paul Acquah, Governor of the Bank of Ghana said on Tuesday.

"We have seen robust revenue growth alongside some rebalancing in expenditures compared with the outturn for the same period in 2008," he told a press conference after a meeting of the Monetary Policy Committee.

Total revenue and grants at the end of June 2009 amounted to GH¢2.6 billion (12.3 per cent of GDP) compared with GH¢2.1 billion (13.2 per cent) for the corresponding period of 2008. In year-on-year terms, total revenue and grants increased by 23.5 per cent, compared with 5.6 per cent recorded in 2008. Grants for the period amounted to GH¢351.9 million (1.6 per cent of GDP) compared with GH¢352.3 million (1.9 per cent of GDP) for the same period in 2008.

However, Dr Acquah said total expenditure (excluding foreign financed capital expenditure) at the end of June was GH¢3.0 billion (14.2 per cent of GDP) compared with GH¢2.7 billion (16.6 percent of GDP) for the same period in 2008.

This represents a year-on-year growth of 13.6 per cent compared with 20.8 per cent for the same period in 2008. Dr Acquah said the overall budget operations for the first half of the year resulted in a deficit (narrow) of GH¢549.2 million (2.5 per cent of GDP) compared with GH¢700.2 million (4.3 per cent) for the same period in 2008.

The deficit of GH¢549.2 million, in addition to a foreign loan repayment of GH¢84.9 million was financed from domestic sources to the tune of GH¢634.2 million (3.0 percent of GDP).

"Disbursements of external budgetary support are phased to take place in the second half of the year that would result in increased pace of spending within the budgetary envelope with increased contribution of external funding," Dr Acquah said.

The stock of domestic debt (gross), which was GH¢4,800.2 million (27.2 percent of GDP) at the end of 2008, increased to GH¢5,288.2 million (24.7 percent of GDP) at the end of June 2009. External debt also increased from US$3,982.6 million (28.1 per cent of GDP) at the end December 2008 to US$4,207.0 million (28.9 per cent of GDP), bringing total public debt stock to US$7,798.3 million (53.6 per cent of GDP) at the end of June 2009 down from US$7,918.1 million (54.6 per cent of GDP) at the end of December 2008.