Government maintains end of year inflation at 15 percent in Mid-Year Budget

Government has announced some key revisions to the country’s macroeconomic fiscal targets for 2024.

Presenting the Mid-year Budget, Finance Minister, Mohamed Amin Adam said the Overall Real GDP Growth rate has been revised upwards from 2.8 percent to 3.1 percent.

He stated that government has decided to maintain the end of year inflation target unchanged at 15 percent.

In addition, Non-Oil Real GDP Growth rate was also revised upwards from 2.1 percent to 2.8 percent.

Dr. Amin Adam said that Primary Balance on Commitment basis has also been maintained at a surplus of 0.5 percent; while Gross International Reserves (including oil funds and encumbered/pledged assets) is expected to cover not less than 3.0 months of imports.

Announcing some revision to the 2024 fiscal framework, he explained that the primary balance on a commitment basis remains unchanged at the targeted surplus of 0.5% of GDP, in line with the IMF-supported PC-PEG objectives.

According to him, Total Revenue and Grants have been revised upward by 0.5 percent to ¢177,220 million (17.4% of GDP) in 2024, from the 2024 Budget target of ¢176,414 million (16.8% of GDP).

This, he pointed out largely reflects the increase in Non-Oil Non-Tax Revenue which has been increased from ¢14,837 million (1.4% of GDP) to GH¢15,638 million (1.5% of GDP) to reflect dividends from interest accrued in the ESLA accounts.

He noted, “Mr. Speaker, over the last two years, Government has embarked on a number of decisive measures to get us back on the path of fiscal consolidation, economic stability and growth. I am happy to note that these policies that we have implemented are yielding the expected results.

• Growth continues to exceed our expectations. The 4.7 percent growth rate
reported by the Ghana Statistical Service for first quarter 2024 exceeds the revised target of 3.1 percent;
• Inflation is declining. End-June inflation rate of 22.8 percent, a reduction of
31 percentage points since December, 2022, confirms the target threshold of +/-2 of 15 percent by end 2024 is possible;
• Exchange rate has largely stabilised, compared to December, 2022, despite the recent pressures. The 18.6 percent depreciation rate to the US Dollar as of June 2024, represents an improvement over the 22.0 percent recorded for the same period last year; and
• Gross International Reserves reached 3.1 months of import as at end June 2024 against 2.5 months of imports in the same period last year.

He added, “Mr. Speaker, it is evident that we are on the right trajectory. The economy is rebounding stronger than anticipated. The choices we have made and the policies we are implementing are yielding results. We have reversed the negative trends, all the indicators are looking better. I want to assure you that we will stay on this path and continue to make the right choices. Our economic recovery is fast and strong.”