This will be 3.2 percentage points lower than the 2014 deficit of 10.2 percent and 0.3 percentage points lower than the 7.3 percent projections by both the 2016 budget and the International Monetary Fund (IMF).
Minister for Finance Seth Terkper told the media here on Tuesday the economy had seen significant improvements since the government started on the path of fiscal consolidation two-and-a-half years ago.
In his presentation themed “The Turn-Around Story”, the minister said primary balance was expected to hit -0.2 percent, the first time to hit a neutral figure since the era of debt forgiveness under the Highly Indebted Poor Country (HIPC) initiative.
He explained that the depreciation of the local Cedi currency and fuel price adjustments had pushed headline inflation out of the target band, adding however that a tight monetary policy stance in recent months had reduced exchange rate volatility while lower crude oil prices had stabilized the outlook for inflation.
Fiscal consolidation seems to be bearing fruit and the gap between revenues and expenditures narrowing. Deficit has reduced from 11.5 percent of GDP in 2012 to a provisional 7 percent of GDP in 2015, according to Terkper.
These notwithstanding, the minister said the change would be much more important if fiscal deficit was seen to be going down, pledging that the government would not be complacent at the turn of events.
“The currency is stabilizing as inflows improve; seasonal pressures subside, and policy actions take effect,” added the minister.
The minister reiterated that the 2016 budget might be revised due to the continuous fall in global crude prices.
Ghana entered a three-year economic support program with the IMF after fiscal deficit rose to 11.5 percent in 2012 and could only drop to 10.2 percent in 2014 against projections. Enditem