Finance Minister Ken Ofori-Atta says government will scale down the earlier projected 2021 fiscal deficit from 9.6 percent of gross domestic product (GDP) to 8.3 percent of GDP.
This, according to the Minister, reflects expected improved revenues from the anticipated pick-up of economic activities and a more rationalised public expenditure programme in 2021.
Mr. Ofori-Atta made this known when he presented revenue and expenditure estimates for the first quarter of 2021 to Parliament on Wednesday. Lawmakers are expected to approve the estimates to enable the government to run until a full post-election budget statement is prepared by March next year.
Although the projected 2021 deficit exceeds the legally-established limit of 5 percent of GDP, the minister was certain that the country would return to compliance with the limit before 2024.
“With this path, we expect a return to the fiscal responsibility threshold of 5 percent of GDP fiscal deficit and a positive primary balance earlier than the 2024 fiscal year previously announced,” he said.
He further assured that government is approaching the next fiscal year with increased optimism, saying, “we expect growth to rebound strongly in 2021 at 5.7 percent as a result of our implementation of the transformation and revitalisation phase of the Ghana CARES (Obaatanpa) Programme.”
The country’s fiscal deficit is projected to reach 11.4 percent of GDP by the end of 2020 from the 4.7 percent initially estimated for the fiscal year. This has largely been attributed to the impact of the novel coronavirus on the economy.
The overall fiscal deficit resulting from the revenue and expenditure performance for January through September 2020 stood at GH¢34.6bn, representing about 9 percent of GDP, against a target GH¢34.3bn.
The corresponding primary balance was a deficit of GH¢15.7bn, representing 4.1 percent of GDP, against the target of GH¢15.4bn.