Databank Research predicts Ghana's fiscal deficit to narrow to 4.5% in 2024

Ghanaian

Databank Research has revealed that Ghana's fiscal deficit to Gross Domestic Product (GDP) ratio is anticipated to reduce to 4.5% ± 50 basis points in 2024.

This projection is attributed to expected interest savings resulting from external debt restructuring, despite concerns about potential fiscal overruns associated with elections.

As of September 2023, the Bank of Ghana reported the country's

Read full articlefiscal deficit at 2.5% of GDP. In its 2024 Quarterly Report, Databank Research emphasised the potential positive impact of interest savings from ongoing external debt restructuring on Ghana's fiscal balance.

The government's budget for external interest payments is GH¢19.04 billion, even as negotiations with creditor groups continue. Databank Research anticipates that concluding restructuring deals could lead to interest savings, contributing to an improved fiscal balance.

In 2024, the government plans to allocate GH¢55.93 billion for interest payments and GH¢63.8 billion for employee compensation, totaling a budget of GH¢226.68 billion.

To support these expenditures, the government aims to mobilise GH¢176.41 billion, with GH¢173 billion expected to come from domestic revenue and grants.