Review of Economic Performance, laid before Parliament

Accra, Nov. 4, GNA- The Minister of Finance and Economic Planning, Mr Yaw Osafo-Maafo on Tuesday, laid before Parliament a Review of the Economic Performance based on this year's Budget Statement and Economic Policy.

He said the major thrust of Government's economic programme for the medium term as articulated in the Ghana Poverty Reduction Strategy (GPRS) is growth and poverty reduction.


He said government is, therefore, concerned not only about poverty reduction but also the sources of growth in the economy that will accelerate poverty reduction.


The Minister said in the 2003 budget, the key macro economic targets were a real Gross Domestic Product (GDP) of at least 4.7 per cent, a reduction in the rate of inflation from 15.2 per cent at the end of 2002 to 9.0 per cent by the end of 2003.


Others were an overall budget deficit of 3.6 per cent of GDP and rebuilding of gross official reserves holdings equivalent to 2.3 months of imports.


Mr Osafo-Maafo said the institution of prudent economic measures including the rationalization of energy prices to bring petroleum and utility prices to economic levels, led to a rise in the inflation rate from 16.3 per cent at the end of January 2003 to 29.4 per cent in February 2003.


He said in spite of delays in implementing some of the new revenue measures approved as part of the 2003 Budget, substantial progress have been made in improving revenue performance, strengthening public expenditure management and using appropriate monetary policy to achieve targets.

The Minister said overall tax revenue outturn for the period has been above target by 529 billion cedis, and expenditures were kept within the budget ceilings and this contributed to a net repayment of government domestic debt of 429 billion cedis as against a target borrowing of 905.3 billion cedis for the period under review.


Mr Osafo-Maafo said there have been sharp declines in the month-to month inflation rates since the petroleum price-induced spike experienced in February and the monthly change in prices, declined gradually and steadily to 0.7 per cent in July 2003.


Inflation over 12 months in September was 26.8 per cent, lower than the April rate of 30.0 per cent while there has been relative stability in the value of the Cedi against all major currencies.


He said Interest rates have fallen with the Bank of Ghana announcing in October 2003, a reduction in its prime rate from 26 per cent to 24 per cent.


The overall budget balance for the first seven months was better than programmed. It showed a deficit of 0.6 per cent of GDP as against the period target of a deficit of 2.7 per cent of GDP.


Mr Osafo-Maafo said the domestic primary balance registered a surplus of 1.3 per cent of GDP better than the targeted deficit of 0.7 per cent of GDP and international reserves performed better than expected, registering the equivalent of about 3.4 months of imports, the highest level in decades.