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Fiscal constraints, low revenue performance in half-year 2022 a concern – ISSER

The Institute of Statistical, Social and Economic Research (ISSER) has expressed concern about the significant fiscal constraints, mounting fiscal pressures, and less robust revenue performance in the first-half of 2022.

According to the research institution, the shortfalls in government revenue (12.9 per cent), comparatively to faster execution of expenditure (on target) should also be of  concern.

In its State of the Ghanaian Economy in 2021 and Quarter 3 2022 Economic Performance Review, it said revenue handles with the exception of oil and gas, GETFund levy and other direct taxes fell short of targets especially non-oil-non-tax rev (34.4 per cent).

Grants according to myjoyonline.com also fell below target by 22.1 per cent and recorded a negative year-on-year growth of 65.2 per cent.

For expenditure, with the exception of interest payments (highest expenditure item), capital expenditure and subsidies – all key expenditure items were contained within their respective targets.

Again, domestic capital expenditure and use of goods and services recorded a deviation of 77.4 per cent and 40.8 per cent respectively, below target, reflecting the cuts in discretionary spending approved by Cabinet.

As of June 2022, overall fiscal deficit was ¢28.153 billion on cash basis (5.6 per cent of GDP), against a deficit target of ¢19.73 billion (3.9% of GDP).

ISSER said there was a possibility of missed fiscal consolidation in 2022.

As of June 2022, overall fiscal deficit was ¢28.153 billion on cash basis (5.6 per cent of GDP), against a deficit target of ¢19.73 billion (3.9 per cent of GDP).

Public debt as of end June 2022 was 78.3 per cent of GDP, an increase of 1.7 per cent of GDP.

Fiscal outlook

The report said the revision of fiscal deficit from a target of 7.4 per cent to a lower target of 6.6 per cent of GDP will be underpinned by the implementation of 30 per cent discretionary expenditure cuts and other expenditure measures.

Total expenditure (including arrears and discrepancy) has been revised downward to ¢135.7 billion (22.9 per cent of revised GDP), from the 2022 budget target of 27.4 per cent of GDP – 4.5 per cent GDP reduction.

Also, total revenue and grants has been revised down to ¢96.84 billion (16.4 per cent  of revised GDP) in from the 2022 budget target of ¢100.517 billion (20.0 per cent  of GDP) -3.7 per cent  GDP reduction.

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