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Key Highlight of the 2018 Budget Statement and Economic Policy

By Kwabena Owusu-Ampratwum

The Finance Minister has been outlining the government's budget for 2018 to parliament. Here are some key highlights of the budget under the theme “Putting Ghana to work”

MACROECONOMIC PERFORMANCE FOR 2017

  • Overall real GDP (as of June) 7.8%
    Non-Oil real GDP (as of June) 4.0%
    End-period inflation (as of October) 11.6%
    Overall budget deficit on cash basis as percentage of GDP(Sept) 4.5%
    Primary balance (Sept) 0.3%
    Current account balance (August) (0.2%)
    Gross International Reserves (import cover)-Sept 3.9%
    End year expected deficit 6.3%

2017 SECTOR GROWTH

  • Agriculture 4.3%
    Industry 17.7%
    Services 4.7%

EXCHANGE RATE DEVELOPMENTS -2017

  • Cedi/Dollar depreciation 4.0%

INTEREST RATE DEVELOPMENTS – 2017

  • 91-Day 13.2%182-Day 14.1%
    1-Year 15.0%
    Interbank Average 20.94%
    Average Lending rates to DMBs 28.97%

POLICY INITIATIVES FOR 2018

  • The Akufo-Addo Programme For Economic Transformation (Aapet)
    Financial Sector Initiatives
    Energy Sector Policy Initiatives
    Revenue Measures
    Expenditure Measures
    Voluntary Education Fund

OTHER INITIATIVES

  • National LPG Promotion Policy will be rolled out
    Electricity Tariff Reforms (Reduction)
    Residential - Up to 13%
    Non Residential - 13%
    Special Load Tariff- Low Voltage - 13%
    Special Load Tariff -Medium Voltage - 11%
    Special Load Tariff -High Voltage - 14%
    High Voltage Mines - 21%

 

MACROECONOMIC PERFORMANCE FOR 2017

  • Provisional data on the performance of the economy from January-
    September, 2017 shows nearly all the macroeconomic indicators are on
    target. A summary of this performance is as follows:
  • Overall real GDP grew by 7.8 percent as of June against 2.7 percent in
    same period 2016. It is estimated to grow by 7.9 percent at end of 2017,
    up from the original forecast of 6.3 percent;
  • Non-Oil real GDP grew at an estimated 4.0 percent as of June 2017
    compared to 5.9 percent in the same period in 2016. Non-oil GDP
    growth is estimated at 4.8 percent at the end of 2017;
  • End-period inflation was 11.6 percent in October, 2017 compared to 15.8
    percent at the same period in 2016;
  • The overall budget deficit on cash basis was 4.5 percent of GDP in
    September, 2017 against a target of 4.8 percent of GDP and an outturn
    of 6.4 percent in the same period in 2016;
  • The primary balance posted a surplus of 0.3 percent of GDP in
    September, 2017, as targeted and is a significant improvement over a
    deficit of 1.6 percent realized during the same period in 2016;
  • The current account balance registered a deficit estimated at 0.2 percent
    of GDP in August, 2017 compared with 2.6 percent in August, 2016; and
  • The country‟s Gross International Reserves which stood at US$6.9 billion
    by end-September 2017, could cover 3.9 months of imports compared to
    the US$4.8 billion or 2.5 months import cover recorded in the same
    period of 2016.