Revenue and expenditure estimates to result in budget deficit in 2016

Mr Seth Terkper on Friday, said based on the revenue and expenditure estimates, the 2016 budget would result in an overall budget deficit of GH¢8,407.7 million, equivalent to 5.3 per cent of Gross Domestic Product (GDP).

He said financing of the deficit would be from both domestic and foreign sources, with a Net Domestic Financing estimated at GH¢5,441.2 million, which is equivalent to 3.4 per cent of GDP, and financing from foreign sources also estimated at GH¢3,398.9 million, equivalent to 2.1 per cent of GDP.

Mr Terkper made these projections in the Budget Statement and Economic Policy of the Government for the 2016 financial year to Parliament in Accra.

He said GH¢432.4 million, equivalent to 0.3 per cent of GDP is estimated to be saved in the Ghana Petroleum Funds, the Sinking Fund and the Contingency Fund.

He said monetary policy would however continue to be guided by the Bank of Ghana’s (BoG) inflation targeting framework, which aims to maintain headline inflation at the midpoint of the target range (8±2 per cent) in the medium term, in the context of a floating exchange rate regime.

The Minister said the BoG would continue to use the policy tools available to guide its policy decisions and strengthen its monetary policy formulation process to ensure that inflation and inflation expectations move gradually towards the target band in the medium term.

He said in addition, the BoG would reform its monetary operations, in order to facilitate money market development and enhance the effectiveness of the inflation targeting framework.

Source: GNA