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2013 Budget highlights

By GNA

Accra, March 5, GNA - Highlights of the 2013 Budget Statement and Economic Policy presented to Parliament on Tuesday by the Finance and Economic Planning Minister, Seth Terkper are as follows:

MACROECONOMIC PERFORMANCE FOR 2012
GDP
Ghana recorded a provisional GDP growth of 7.1 percent in 2012, from 14.4 percent in 2011, and 8.0 percent in 2010.

·         The 2012 provisional growth rate of 7.1 percent is still high given that it is on top of the growth rate of 14.4 percent recorded in 2011 when the GDP first reflected the impact of crude oil production in commercial quantities.

·         The 2012 provisional growth rate compares favourably with the global growth of 3.2 percent and sub-Saharan Africa growth of 4.8 percent, according to the IMF's World

·         The economy attains an overall fiscal deficit equivalent to 12.0 percent of GDP, against a target deficit equivalent to 6.7 percent of GDP.

·         Headline inflation went up marginally from 8.6 percent in 2011 to 8.8 percent in 2012, continuing the record single digit inflation for more than two years.

·         Interest rates on 91-day and 182-day bills went up from 10.7 percent and 11.3 percent to 22.9 percent and 22.88 percent, respectively, in December 2011 and December 2012.

·         Rates on 1-year and 2-year fixed notes increased from 11.3 percent and 12.4 percent in December 2011 to 22.9 percent and 23 percent in December 2012.

·         The long dated instruments such as 3-year and 5-year bonds also rose from 14 and 14.3 percent in 2011 to 24 percent and 23 percent, respectively, during the period.

·         Gross international reserves stood at 5,348.9 million US dollars at the end of 2012, compared to 5,474.6 million US dollars in 2011 and equivalent to 3 months of import cover.

MAJOR ACHIEVEMENTS OF THE ECONOMY
Real Sector
·         The Agriculture Sector recorded a growth rate of 2.6 percent up from 2012 an actual outturn of 0.8 percent in 2011.

·         The Industrial Sector, the second largest sector with a share of 27.6 percent, recorded a growth rate of 7.0 percent in 2012 against a target of 15.8 percent and an actual outturn of 41.1 percent in 2011.

·         The Services Sector, the largest sector of the economy, recorded the highest growth rate in the year under review. The Sector exceeded its 2012 target of 7.7 per cent by 1.1 percentage points to register a growth rate of 8.8 percent.

Fiscal Sector
·         An overall fiscal deficit equivalent to 12.0 percent of GDP, against a target deficit equivalent to 6.7 percent of GDP for 2012.

Revenue and Grants
·         The total revenue and grants for the period under review amounted to GH¢16,668.4 million, against a target of GH¢16,927.6 million.

Expenditure
·         Total expenditure, including payments made for the clearance of arrears and outstanding commitments, totaled GH¢25,317.1 million, equivalent to 35.2 percent of GDP. The outturn was 17.2 percent higher than the budget target of GH¢21,596.6 million and 64.06 percent higher than the outturn for 2011.

Overall Budget Balance and Financing
·         The overall budget balance on a cash basis was a deficit of GH¢8,648.7 million, equivalent to 12.0 percent of GDP. This was against a deficit target of GH¢4,669.0 million, equivalent to 6.7 percent of GDP.

2012 Petroleum Receipts
·         The total volume of crude oil produced in 2012 was 26,351,278 barrels representing an increase of 8.9 per cent over the 2011 production levels.

Medium-Term Targets for 2013 - 2015
·         An average GDP growth rate of at least 8 percent per annum;

A single digit rate of inflation;
An overall average budget deficit equivalent to [5 percent of GDP]; and

Gross International Reserves that will cover not less than four months of import of goods and services.

Macroeconomic Targets for 2013
·         Real non-oil GDP growth of 6.5 percent;
Real overall GDP growth including oil of 8.0 percent;

Average inflation of 8.9 percent;
End period inflation of 9.0 percent;
Overall budget deficit equivalent to 9.0 percent of GDP; and

Gross International Reserves of not less than three months of import cover for goods and services

The Budget is on the theme: 'Sustaining Confidence in the Future of the Ghanaian Economy'.

GNA