Government revises fiscal deficit to 6.7 per cent of GDP

The revised revenue and expenditure estimates of the 2012 Budget will result in a cash deficit of GH¢4.6 billion, equivalent to 6.7 per cent of Gross Domestic Product (GDP), Dr Kwabena Duffuor, Minister of Finance and Economic Planning, told Parliament in Accra on Wednesday.

This is compared with the main 2012 Budget estimate of GH¢3,369.0 million, or 4.8 per cent of GDP.

Presenting the Mid-Year Review and Supplementary Estimates for 2012, Dr Duffuor said a total amount of GH¢1.3 billion would be required to finance the revised budget deficit of which foreign financing was estimated at GH¢205.50 million and domestic financing at GH¢1.09 billion.

He said, “It is important to point out that while the new fiscal deficit target to be financed in 2012 is 6.7 per cent of GDP. This is consistent with the deficit target agreed between the Government and the IMF”.

“Indeed, the IMF considers the new fiscal deficit as sustainable given the rapid growth of the economy and emerging challenges”.

Dr Duffuor said the economic outlook was positive and that government was committed to sustaining the achievements made so far to ensure that the country remained in the group of the world's high performers.

Government, he said, would continue to strengthen Public Financial Management System to ensure transparent and accountable economic governance and sustain the fiscal discipline that had been achieved so far.**