The Government has revised its macroeconomic growth targets with the overall real Gross Domestic Product (GDP), including oil, reducing from eight per cent to 7.1 per cent and non-oil real GDP growth sliding from 7.4 per cent to 6.6 per cent.
The Minister of Finance and Economic Planning, Mr Seth E. Terkper, who announced this to Parliament on Wednesday, said the global and domestic economic environments had necessitated the revision of the macroeconomic framework and assumptions underlying the 2014 Budget.
The current energy challenge, rising inflation, and interest rates, as well as exchange rate depreciation pose a strong risk to the achievement of the growth target for the year, he explained.
Presenting the Government’s Mid-Year Review of the Budget Statement and Economic Policy and Supplementary Estimates of Government for the 2014 fiscal year, the Minister said an end year inflation target was revised from 9.5 per cent to 13.0 per cent.
He said the overall budget deficit target also revised also from 8.5 per cent of GDP to 8.8 per cent; and Gross International Reserves of not less than 3 months of import cover of goods and services.
As a result of the revision, the 2014 revenue and expenditure estimates have also been adjusted to reflect those developments.
The decline in gold prices on the international market, he said, have also affected the implementation of some of the revenue measures announced in the 2014 Budget.
Other contributing factors, he said, are the implementation of the 10 per cent Cost of Living Allowance (COLA) to Government employees, which took effect on May 2014; slower-than-expected implementation of utility and petroleum price adjustments; and exchange rate depreciation.
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