Government has revised the 2024 macroeconomic framework due to recent domestic and global economic developments, including the debt restructuring programme with external and domestic creditors.
The development has also led to the upward revision of the fiscal framework with the expectation that the primary balance on a commitment basis remains unchanged at the targeted surplus of 0.5 per cent of Gross Domestic Product (GDP).
Dr Amin Adam, the Minister of Finance, made this known during a presentation of the Mid-year Budget Review on the floor of Parliament.
“Mr Speaker, key revisions to the macro-fiscal targets for 2024 include, overall real GDP growth rate revised upwards from 2.8 per cent to 3.1 per cent; non-oil real GDP growth rate revised upwards from 2.1 per cent to 2.8 per cent and growth in GDP deflator scaled down from 20.2 per cent to 17.5 per cent,” he said.
He noted that the Nominal overall GDP had been revised from GH¢1.05 trillion to GH¢1.02 trillion with non-Oil GDP revised from GH¢979 billion to GH¢977 billion and end-period headline inflation remaining unchanged at 15 per cent.
He also said gross international reserves, including oil funds and encumbered/pledged assets were expected to cover not less than 3.0 months of imports.
Under the fiscal framework for the year, Dr Adam said the total revenue and grants had been revised upward by 0.5 per cent from GH¢176.4 billion, thus 16.8 per cent of GDP to GH¢177.2 billion representing 17.4 per cent of GDP.
He explained that the upward adjustment was to reflect an increase in Non-Oil Non-Tax Revenue, which had been increased from GH¢14.8 billion, thus 1.4 per cent of GDP to GH¢15.6 billion, an equivalent of 1.5 per cent of GDP as a result of dividends from interest accrued in the ESLA accounts.
He indicated that total expenditure on a commitment basis had been revised downward by 2.1 per cent, from the original budget projection of GH¢226.7 billion representing 21.6 per cent of GDP to GH¢219.7 billion, equivalent to 21.5 per cent of GDP.
“This revision is largely on the back of Interest payments which has been revised downwards by GH¢7.9 billion to reflect the impact of the external debt restructuring on external interest payment,” he said.
The Minister also said the overall balance on a commitment basis had been revised from a deficit of GH¢50.3 billion, 4.8 per cent of GDP to a deficit of GH¢42.5 billion, thus 4.2 per cent of GDP.
He explained that the cash deficit of GH¢54.1 billion,5.3 per cent of GDP was expected to be financed from both foreign and domestic sources.
He disclosed that the net foreign financing would amount to GH¢15.2billion,1.5% of GDP, representing 28.1 per cent of the total financing for 2024 while foreign financing would include disbursements from the second and third tranche of the International Monetary Fund (IMF) programme and the World Bank Development Policy Operation (DPO) funding.
“Mr Speaker, the Domestic Financing will amount to GH¢38.9 billion (3.8% of revised GDP), representing 71.9 percent of the total financing for 2024.
This is expected to be sourced from the issuances of debt at the short end of the domestic market and inflows from Ghana Petroleum Funds,” he added