Ghana to miss fiscal deficit target of 4.7 percent, according to Databank Research report

The figure is a 0.2 percent increase against the government target of 4.7 percent of Gross Domestic Product (GDP).

The 4.9 of GDP target excludes Bank of Ghana’s bailout funds.

“Against our expectations of public expenditure and revenue dynamics, we forecast the overall fiscal deficit at 4.9% ± 0.5% by end-2020 (Government Target: 4.7% of GDP),” the report said.

Adding that “We expect spending pressures to remain intense in 2020, largely driven by interest payments, infrastructure spending, social intervention policies and a one-off budget for the 2020 elections. This could pose an upside risk to the overall budget deficit in 2020, resulting in higher borrowing requirements for the year.”

Databank Research, however, said the fiscal reforms such as the Fiscal Responsibility Act and PFM Act could provide crucial restraints.

2020 revenue target

Ghana’s 2020 budget projects a 26.7% year-on-year growth in Total Revenue & Grants to GHS67.1 billion.

This revenue outlook is based on expected 12-month inflows from the tax measures implemented in late-2019 supported by ongoing reforms in tax administration and continued enforcement of tax compliance, the Economic Outlook Report emphasised.