Government revises overall GDP growth rate to 3.7%

The government has revised the overall gross domestic product (GDP) growth rate for this year to 3.7% down from 5.8%, the Minister for Finance, Ken Ofori-Atta has said.

Presenting the 2022 Mid-Year Budget Review in Parliament on Monday (25 July), Ofori-Atta said, “Furthermore, based on the developments for the first six months of 2022 and outlook for the rest of the year, we have accordingly revised the macro-fiscal targets for 2022 as follows: Overall GDP Growth rate of 3.7% down from 5.8%.”

“Non-Oil GDP Growth rate of to 4.3% down from 5.9%, end period inflation of 28.5% up from 8%.”

“The overall fiscal deficit of 6.6% of GDP down from 7.4%,” Ofori-Atta added.

He said provisional Q1-2022 National Accounts Statistics published by Ghana Statistical Service (GSS) in June 2022 show that the overall real GDP growth for the first quarter of 2022 was 3.3% compared to 3.6% recorded in 2021. Non-oil GDP for the first quarter of 2022 grew by 3.7% compared with the first quarter 2020 growth of 5.3%.

Regarding the revision to 2022 Macroeconomic Framework, Ofori-Atta said “as I have already indicated, the macroeconomic environment has significantly changed, prompting the revision of the macroeconomic framework.”

Revenue targets

Ofori-Atta said the total revenue and grants have now been revised to GHC96,842 million (16.4% of GDP) in 2022, down from the 2022 Budget target of GHC100,517 million (20.0% of GDP) representing 3.7% reduction.

He said the total expenditure (including payments for the clearance of arrears) has also been revised downward to GHC135,742 million (22.9% of GDP) from the original budget projection of GHC137,529 million (27.4% of GDP).

“Not seeking additional funds”

The Finance Minister said despite the difficulties in achieving the needed revenue targets, the government is determined to stay within the appropriation for 2022.

“Mr. Speaker, we have seen some major shifts in our budget assumptions compared to November, 2021, when we presented the Budget. These changes have led to reduced revenues, increased interest payments and changes in interest rates and exchange rates. However, we are committed to staying within the appropriation for 2022.”

“In spite of the underperforming revenues and strong external headwinds, we are not seeking additional funds in this Mid-Year Review,” Ofori-Atta said.

“We are determined to efficiently use the windfall from the upstream petroleum sector to make-up for our revenue shortfall and aggressively improve our revenues even as we rationalise expenditures.

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