Ghana’s GDP projected to reach 12.3% in 2011
The government, envisaging strong performance in the manufacturing and services sectors and the coming on stream of oil production and exports, has projected real GDP growth to reach about 12.3 per cent in 2011.
Dr Kwabena Duffuor, Minister of Finance and Economic Planning, announced this when he presented the government’s fiscal policy (budget) for the 2011 financial year at the Parliament House in Accra on Thursday.
The buddget is on the theme: “Stimulating Growth for Development and Job Creation.”
Dr Duffuor said even though real GDP growth slowed down to 4.1 per cent in 2009, mainly on account of the impact of the world economic crisis, growth was expected to bounce back to about 5.9 per cent in 2010 as the domestic and world economic environment improved.
He said provisional GDP estimates released by the Ghana Statistical Service (GSS) indicated that the Ghanaian economy had undergone a significant structural change. GSS added that the services sector had overtaken the agricultural sector, which had for long dominated the country’s economic activity.
He said: “Cocoa production, the mainstay of the agricultural sector, however, continues to grow strongly, with output expected to reach 650,000 metric tons this year”.
The Minister attributed the continued strong performance of the cocoa sub-sector to increased government support to the industry, taking the form of higher domestic producer prices, improved disease and pest control programmes, rehabilitation of feeder roads in cocoa growing areas, and payment of decent bonus packages to cocoa farmers.
Dr Duffuor said the growth of the economy in the medium term would be more broad-based, with the manufacturing sector expected to expand and the oil and gas sector joining in very strongly.
“Growth in the manufacturing sector will be driven by the increased activity in construction, mining, oil-related infrastructure, electricity and water. The services sector is also expected to continue to grow at a faster rate, on account of the expected increase in activities in the tourism, wholesale and retail trade sub-sectors, as well as finance.”
Dr Duffuor said provisional data on the implementation of the budget for the first three quarters of 2010 indicated that revenues were below the budget target by 1.8 per cent as against rising expenditures, which were higher than estimated by 8.0 per cent.
He said given the performance of revenues and expenditures for the first three quarters of 2010, the overall budget balance showed a deficit of GH¢2,294.3 million, which was equivalent to 8.8 per cent of GDP, compared with a budget target of a deficit equivalent to 7.6 per cent of GDP.
“The bigger deficit is mainly as a result of increased disbursement of project loans than was anticipated, and the accelerated clearance of domestic arrears than programmed for the first three quarters of the year.”
He said based on the projected revenues and expenditures up to the end of the 2010 fiscal year, the fiscal deficit for the full year was expected to be GH¢2,514.3 million, equivalent to 9.7 per cent of GDP.
Dr Duffuor said the projected rise in the fiscal deficit was mainly as a result of the projected higher disbursement of project loans from development partners than was earlier estimated.
He said on the domestic front, primary balance for the period under review registered a deficit equivalent to 2.1 per cent of GDP, against a budget target of a deficit equivalent to 3.2 per cent of GDP.
He said the performance of the external sector of the economy in 2010 fiscal year had been very remarkable.
The Minister added that for the first time in many years, the balance of payments registered a surplus of over US$100 million in the first nine months of the year, and the projected surplus for the fiscal year is US$315 million.
“The stock of gross foreign reserves of the country increased to US$3,973 million in October 2010 from US$3,165 at the end of December 2009.
“This shows that the NDC Government has increased the country’s cover of imports of goods and services from 1.8 months in 2008 to 2.4 months in 2009, and to 3.2 months in 2010,” he said.
Source: GNA