Government has through the Ministry of Finance set a macroeconomic target of growing the economy by at least 2.8 percent of Gross Domestic Product (GDP) in the 2024 fiscal year.
It also intends to achieve a Non-Oil Real GDP growth target of at least 2.1 percent; End-Period inflation rate of 15.0 percent; primary balance on a commitment basis of a surplus of 0.5 per cent of GDP; and Gross International Reserves to cover not less than 3 months of imports.
The projections were prepared in line with the objectives and policy priorities of the 3-year IMF-Supported Post Covid-19 –Programme for Economic Growth (PC-PEG).
The Minister of Finance, Ken Ofori-Atta made this known when he presented the 2024 the Budget Statement and Economic Policy of Government for 2024 Financial Year.
Within the medium term, he indicated that government intends to improve the primary balance from a surplus of 0.5 percent of GDP in 2024 to 1.5 percent of GDP from 2025 onwards.
“The Primary Balance on commitment basis is the fiscal anchor we are using to assess our fiscal effort,” he said.
Based on permanent revenue measures amounting to 0.9 per cent of GDP, government projects a Total Revenue and Grants of GH¢176.4 billion, thus 16.8 percent of GDP.
The minister stated that a Total Expenditure on commitment basis is estimated to be GH¢226.7 billion, equivalent of 21.6 per cent of GDP.
He explained that the projection reflects a reduction of 6.1 percentage points of GDP in total expenditures on a commitment basis relative to the outturn in 2022.
“This large decrease comes from the combination of fiscal consolidation efforts of 4.9 percentage points of GDP, reflecting an adjustment in revenue by 1.0 percentage point and primary expenditure by 4.0 percentage point of GDP.
“The potential interest rate saving from the ongoing external debt operation will further bolster public finance sustainability,” he said.
He noted that based on the estimates for total revenue & grants and total expenditure, including arrears clearance, the overall Budget balance to be financed is a fiscal deficit of GH¢ 61.9 billion equivalent to 5.9 percent of GDP.
Meanwhile, he projected a corresponding primary balance deficit of GH¢5.9 billion which was equivalent to 0.6 percent of GDP.