Budget deficit stood at 7% of GDP in quarter 3, 2022

The overall budget deficit of government at the end of September 2022 stood at GH¢41.69 billion, about 7% of Gross Domestic Product.

This is against a programmed deficit target of ¢36.68 billion (6.2% of GDP).

According to Finance Minister, Ken Ofori-Atta, provisional data on government fiscal operations for January to September 2022 shows a shortfall in revenue performance and a faster execution of expenditures.

The corresponding primary balance for the period was a deficit of ¢9.597 billion (1.6% of GDP), against a deficit target of GH¢5.794 billion (1.0% of GDP).

Revenue performance

Total Revenue and Grants amounted to ¢65.39 billion (11.0% of GDP) in quarter 3, 2022.

This is compared with a target of ¢67.30 billion (11.4% of GDP) and the GH¢49.108 billion (10.7% of GDP) recorded in the corresponding period in 2021.

The outturn for Total Revenue and Grants represents a shortfall of 2.8% compared to the period’s target and year-on-year growth of 33.2%.

The shortfall in revenue, according to the Finance Minister, stemmed from the less robust performance recorded in all the revenue handles for the period.

Domestic Revenue for the period amounted to ¢64.60 billion (10.9% of GDP), falling below the target of ¢66.503 billion (11.2% of GDP)
by 2.9 percent.

The outturn, however, represents a year-on-year growth of 34.0% and constituted 98.8% of Total Revenue and Grants.

Expenditure performance

Total Expenditure including arrears clearance and discrepancy for
the period amounted to ¢109.421 billion (18.5% of GDP), above the target of ¢103.992 billion (17.6% of GDP) by 5.2%.

Compensation of Employees amounted to ¢27.146 billion (4.6% of GDP), 2.9% below the budgetary provision of GH¢27.947 million (4.7% of GDP). The Wage bill constituted 91.3% of the total Compensation and amounted to GH¢24.734 billion.

Interest Payments for the period amounted to GH¢32.101 billion (5.4% of GDP), against the target of ¢30.890 million (5.2% of GDP) reflecting the higher cost of borrowing and the adverse impact of the currency depreciation on external interest.

Domestic Interest Payments constituted 78 percent of total Interest
Payments for the period.

Source: Ghana News