As the country’s economic outlook appears gloomy, government has been forced to make concessions and revise its projections and targets for 2014.
Presenting the 2014 Supplementary budget to Parliament Wednesday, July 16, 2014, Finance and Economic Planning Minister Seth Terkper, said the Real GDP target of 8 per cent has been revised to 7.1 per cent.
An end of year inflation target of nine percent has also been revised to 13 percent, Mr Terpker said.
Government’s plan to cut the budget deficit from a staggering 12 in 1013 to 8.5 in 2014 has been thwarted.
The target is now to attain an 8.8 per cent budget deficit this year.
Owing to the steep depreciation in the value of the local currency, interest payment on loans has also shot up from 6.2 billion cedis to 7.9 billion, the minister said.
“As a result of the revisions made to the macroeconomic framework arising from developments in both the domestic and global economic environment and the fiscal performance for the first five months of the year, the 2014 revenue and expenditure estimates have been revised to reflect these developments,” he stated.
The Finance Minister cited some of the developments in the domestic economy that have necessitated the revisions to the fiscal framework are as decline in gold prices; challenges in the implementation of some of the revenue measures announced in the 2014 Budget; slowdown in economic activity due to the energy crisis and exchange rate depreciation; rising interest rates leading to higher interest costs; implementation of the 10 percent Cost of Living Allowance (COLA) to Government employees, effective May 2014; slower-than-expected implementation of utility and petroleum price adjustments; and exchange rate depreciation.
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