Ghana narrows fiscal deficit target after better-than-expected first half
The West African country is emerging from its worst economic crisis in a generation, featuring turmoil in its cocoa and gold industries, a severe cost-of-living squeeze and a lengthy debt-restructuring process.
But this year, key macroeconomic indicators have improved, with growth accelerating to 5.3% year-on-year in the first quarter and inflation falling to 13.7% in June, its lowest since 2021.
The government now expects a fiscal deficit of 3.8% of Gross Domestic Product (GDP) this year, narrower than the 4.1% targeted in March, Finance Minister Cassiel Ato Forson told parliament during a mid-year review of public finances.
In the first six months the deficit was 1.1% of GDP, ahead of the 2.4% targeted.
Forson said economic growth could possibly exceed the March target of 4% and officials were hopeful they could hit the year-end inflation target of 11.9% ahead of schedule.
"We have borrowed less than we planned, signifying strong expenditure control and fiscal discipline," Forson said.
"This is a strong signal to the investor community and all stakeholders that the needed fiscal consolidation is happening here in Ghana and it will be sustained."
In the first half of the year, total revenue and grants were roughly 3% short of target, but expenditure came in 14% below target.
Forson said risks to the public purse included a shortfall in customs revenue, mounting wage pressures and smuggling of marine gas oil, adding Ghana was not out of the woods yet.
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