The mid-year budget review did not include any mention of tax revisions, which may come as a relief to the business community and all Ghanaians.
Prior to the budget presentation, various trade unions, experts, and the minority in parliament had warned the government against any potential tax hikes or the introduction of new taxes in the mid-year review.
Finance Minister Ken Ofori-Atta, during the review’s presentation, emphasized that there was no need for a supplementary budget, indicating that the government did not seek additional funding for the projects outlined in the 2023 budget.
Instead, the government made downward revisions to its Appropriation, reducing allocations from GH¢227.7 billion, as initially presented and approved in November 2022, to GH¢206.0 billion.
Furthermore, key macro-fiscal targets for 2023 were also revised as part of the mid-year budget review.
The Minister announced several revised economic indicators for 2023:
i. The overall Real GDP growth rate is projected to be 1.5 percent, down from the previous estimate of 2.8 percent.
ii. The Non-Oil Real GDP growth rate is expected to be 1.5 percent, down from the previous estimate of 3.0 percent.
iii. The end-period headline inflation is projected to be 31.3 percent, significantly higher than the previous estimate of 18.9 percent.
iv. The Primary Balance on Commitment basis is expected to have a deficit of 0.5 percent of GDP, which contrasts with the previous surplus of 0.7 percent of GDP. This adjustment aligns with the IMF-supported PC-PEG target for Primary balance.
v. The Gross International Reserves (programme definition) are projected to be sufficient to cover at least 0.8 months of imports of goods and services by 2023.
The Minister attributed the downward revision in projected growth for 2023 to a general slowdown in all three sectors of the economy, which was influenced by factors such as the fiscal consolidation plan and challenging global conditions.
However, the Minister provided an optimistic outlook for the subsequent years. He stated that overall GDP growth is anticipated to rebound, with projections of 2.8 percent, 4.7 percent, and 4.9 percent for the years 2024, 2025, and 2026, respectively. These positive forecasts are attributed to the implementation of growth-oriented and structural transformation strategies outlined in the PC-PEG.
Moreover, the Minister highlighted the importance of developing an enhanced Growth Strategy in accordance with the PC-PEG’s directives. This strategy aims to encourage private domestic and foreign investments to further stimulate economic growth and generate more job opportunities. The government expressed confidence in the private sector’s ability to contribute to this growth and employment expansion.