Dr Ernest Addison, BoG Governor
THE PUBLIC debt stock in Ghana increased to GH¢258.0 billion as at the end of June 2020.
This was made known by the Bank of Ghana (BoG) yesterday by Dr. Ernest Addison, Governor of the BoG, when he virtually addressed the media during the 95th Monetary Policy Committee (MPC) press conference.
He said Ghana’s elevated fiscal deficit path had impacted the stock of public debt which rose to 67.0 per cent of GDP (GH¢258.0 billion) at the end of June 2020 compared with 62.4 per cent of GDP (GH¢218.2 billion) at the end of December 2019.
He noted that of the total debt stock, domestic debt was GH¢122.1 billion (31.7 per cent of GDP) while external debt was GH¢136.3 billion (35.4 per cent of GDP).
According to him, the execution of the budget for the first half of the year has been adversely affected by the Covid-19 pandemic through a combination of revenue underperformance and fast-paced spending.
He stated that half-year results indicated an overall budget deficit of 6.3 per cent of GDP, against a target of 3.0 per cent of GDP.
Revenue sources such as, taxes on income and property, taxes on goods and services, international trade taxes and non-tax revenue all underperformed, according to him.
On the expenditure side, he said, employee compensation, and other Covid-19 related expenditures had been the main sources of pressure.
The mid-year budget review has therefore revised upwards the overall budget deficit target to 11.4 per cent of GDP by end of year, from the earlier target of 4.7 per cent of GDP, reflecting an additional 6.7 per cent of GDP attributable to both direct and indirect Covid-19 impact, the governor said.
This means that total revenue and grants for the year 2020 have been revised downward to GH¢53.7 billion (13.9 per cent of GDP) from the initial target of GH¢67.1 billion (16.9 per cent of GDP) while expenditure and arrears clearance is projected to rise to GH¢97.7 billion (25.4 per cent of GDP) from the earlier target of GH¢86.0 billion (21.6 per cent of GDP).
The primary balance was also projected at a deficit of 4.6 per cent of GDP from the initial target of a surplus of 0.7 per cent of GDP, he said.
By Melvin Tarlue