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Gov’t revises fiscal deficit-to-GDP target to 8.3% in 2020

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Government has scaled down the projected 2021 Fiscal Deficit from 9.6% of Gross Domestic Product (GDP) as reported in the Mid-Year Review Budget to 8.3% of GDP.

This reflects improved revenues from the anticipated pick-up of economic activities and a more rationalized public expenditure programme.

According to Finance Minister, Ken Ofori-Atta, it expects the country to return to the fiscal responsibility threshold of 5.0% of GDP and a positive primary balance earlier than the 2024 fiscal year previously announced.

The government exceeded their respective targets for both revenue and expenditure in the first nine months of the year resulting in the fiscal deficit of 9.0% of Gross Domestic Product, Mr. Ofori-Atta emphasised. This is against a programmed deficit of 8.9% of GDP.

Total revenues and grants for the period which totalled GH$36.7billion exceeded the target of GHS35.7 billion by GHS972.7million or 2.7%.

Total expenditures, including arrears clearance, on the other hand, amounted to GHS71.3 billion against a target of GHS70.0 billion, showing a deviation of GHS1.3 billion or 1.8% from target.

The overall fiscal deficit resulting from the revenues and expenditure performance for the period through September 2020 was GHS34.6 billion or 9.0% of GDP against a target GHS34.3 billion or 8.9% of GDP.

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