Ghana’s fiscal deficit is projected to hit 16.4 per cent of Gross Domestic Product (GDP) end-2020, making it the largest ever in the country’s history.
This, is according to the International Monetary Fund (IMF).
The fiscal deficit projection is contrary to that of the Finance Minister’s revised 11.4 per cent projection for end-2020 as stated in the Mid-year budget review.
The Fund’s bigger projection, contained in its October 2020 Fiscal Monitor publication, appears to take into account the expenses incurred by Government in cleaning up the financial and energy sectors – costs which Government has consistently excluded from its fiscal deficit calculation.
It also includes extra expenditure by Government in the provision of free and subsidised utility bills, loans to MSMEs and other interventions.
The Bretton Wood Institution however, stated that Ghana’s fiscal deficit is expected to decline to 9.3 per cent of GDP in 2021, before easing to 6.3 per cent of GDP in 2025.
The Fund’s October 2020 Fiscal Monitor publication also projects debt to rise from the current 68.3 per cent to 76.7 per cent of GDP before the end of 2020.
