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Ghana's Economy Ghana set to halve budget deficit - Terkper

Ghana signed a three-year aid package with the International Monetary Fund (IMF) in 2015 in a bid to cut the budget deficit, contain high public wages and reins in spending.

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Seth Terkper, Finance Minister play

Seth Terkper, Finance Minister

The Finance Minister, Seth Terkper, says Ghana is on course to halve the budget deficit from 12 percent in 2012.

Ghana signed a three-year aid package with the International Monetary Fund (IMF) in 2015 in a bid to cut the budget deficit, contain high public wages and reins in spending.

The Finance Ministry has projected to reduce the deficit to 5.75 percent of Gross Domestic Product (GDP) and an expected growth rate of  4 to 5 percent.

Speaking at the Ghana Economic Forum Wednesday in Accra, Mr Terkper said: "We are set to halve the deficit from 12 percent in 2012, and we have also started stemming the rate of growth."

Inflation for the month of July dropped to 16.7% from 18.4% in June. This was influenced by the stability of the cedi and the beginning of good harvest.

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President John Mahama has said Ghana will come out of the IMF programme with a single digit inflation, a claim the Institute for Fiscal Studies disputes.

With inflation at 16.7 percent, how is the president going to bring it down within 10 percent by next year, through what means,” the Executive Director of IFS, Professor Newman Kusi said in a media interview.

“From the way things are going, I don’t see inflation coming down to single digit,” he added.

Public debt has also decreased from 72 percent of GDP at the end of 2015 to about 63 percent  although fiscal figures  for the first five months of this year show that the government has spent more than GHC 2 billion than forecasted.

Touching on why the government called off the Eurobond sale, Terkper said market conditions were not good.

"We did not call off the 2016 bond, what we did was to suspend pricing. We must sometimes hold our nerves when we're in the capital market to look for the right window before we strike in order to get the best results," he said.

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