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Government targets 9 per cent budget deficit, single digit inflation
 
Posted on: 05-Mar-2013         Source: GNA
 
 
 
Mr Seth Terkper, Minister of Finance and Economic Planning, on Tuesday said government would aim to cut the 2013 budget fiscal deficit to 9 per cent of Gross Domestic Product (GDP) from just more than 12 per cent in 2012 through enhanced tax revenues and expenditure controls.

The 2012 deficit hit 12.1 per cent of GDP almost double its target of 6.7 per cent, due to increased public sector wages, a shortfall in projected tax revenue and widening fuel subsidies.

Mr Tekper, who was presenting the government’s 2013 budget statement and economic policy at Parliament on Tuesday, said the financial statement assumed an overall GDP growth including oil of 8 per cent and targets a year-end inflation rate of 9 per cent.

“Mr Speaker, it is projected that economic growth will remain strong and inflation is also expected to remain in single digit in 2013, in spite of the fiscal challenges and risks that confront the economy,” he said.
He said measures would be taken to protect the credibility of fiscal policies and the deficit target and that strong monetary policy stance was expected to be maintained to ensure the stability of the cedi and support the single digit inflation target.

The Minister said the fiscal programme would hinge on the rationalization of expenditure and strengthened revenue collection.
“There will also be the strengthening of public financial management within the context of government’s macroeconomic policies and fiscal discipline to prevent overspending and avoid new arrears”, he said.

Mr Tekpe said the government envisaged gross international reserves of not less than three months of import cover for goods and services.

He said in the medium term, that is 2013-2015, the government macro-economic targets include an average GDP growth rate of at least 8 per cent per annum, a single digit rate of inflation, an overall average budget deficit equivalent to five per cent and gross international reserves to cover not less than four months of import of goods and services.