The government has targeted to grow the economy by 7.6% in 2019, an increase from last year’s figure of 6.8%.
Presenting the 2019 Budget Statement in Parliament on Thursday, Finance Minister, Ken Ofori-Atta, said the 2019 fiscal year also targets a single-digit inflation of 8.0%, a fiscal deficit of 4.2% of GDP, primary surplus of 1.2% of GDP and a Gross International Reserves to cover not less than 3.5 months of imports.
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Targets for the same indicators in 2018 were as follows:
– End-period inflation of 8.9%
– Fiscal deficit of 4.5% of GDP (3.7% in the rebased series)
– Primary surplus of 1.7% of GDP (1.4 % in the rebased series)
– Gross International Reserves to cover not less than 3.5 months of imports of goods and services.
However, as at the end, September 2018 figures show that real GDP grew by 5.4% in the first half of 2018. Also, non-oil real GDP grew by 4.6% compared to the 2018 target of 5.8%; end-period inflation rate declined from 11.8% at the end of 2017 to 9.8% at the end of September 2018, and further to 9.5 % as of October 2018.
2019 resource allocation
Total expenditure, including clearance of arrears, has been estimated at GH¢73.4 billion, equivalent to 21.3% of GDP, representing a growth of 27% above the projected outturn for 2018.
Expenditure on Wages and Salaries is forecasted at GH¢19.4 billion representing about 26.5% of Total Expenditure.
The wage bill is anticipated to reduce to 5.6% of GDP from the 5.9% t projected outturn for 2018.
Expenditure on Goods and Services is projected at GH¢6.3 billion, representing 1.8% of GDP. The annual growth of 38.8% reflects a full provision made to cater for the Government’s priority programmes, including the flagship Free SHS policy.
A total amount of GH¢18.6 billion has been estimated for Interest Payments of public debt. Of this amount, domestic interest payments will constitute about 77.8% and amount to GH¢14.5 billion.
The government in 2019 will continue to implement the Earmarked Funds Capping and Realignment Act, 2017 (Act 947) to reduce budget rigidities and create fiscal space to fund growth-enhancing expenditures. In this regard, transfers to Statutory Funds as well as all other earmarked funds, are estimated at GH¢13.8 billion, equivalent to 4.0% of GDP, compared to 3.5% in 2018.
Capital Expenditure is projected at GH¢8.5 billion, equivalent to 2.5% of GDP and a growth of 55.7% over the 2018 projected outturn. Of this amount, domestically financed Capital Expenditure is estimated at GH¢3.2 billion or 0.9% of GDP.
An amount of GH¢5.3 billion has been budgeted for Foreign Financed Capital Expenditure and this will be funded by a combination of Project Grants and Loans.