Ghana to p robably keep budget-gap target by cutting spending

Ghana will probably keep its target for the budget deficit by cutting spending when Minister of Finance Seth Terkper presents a revised budget, the head of Parliament’s finance committee said.

Economic growth will be cut to 2.7 percent this year from a previous estimate of 3.9 percent, James Klutse Avedzi, chairman of the committee, said by phone Monday from the capital, Accra. The target for the fiscal gap will remain at 6.5 percent of gross domestic product, he said. Avedzi is a member of the ruling National Democratic Congress.

Terkper may present the revised spending plan as soon as this week after a plunge in oil prices curbed revenue, Avedzi said. The government agreed to about $1 billion in loans from the International Monetary Fund last month to support the budget and boost foreign-currency reserves.

The government will probably cut capital spending and has the option to raise taxes to close the gap, Avedzi said.