The country’s economy is expected to grow provisionally at 7.4 percent for the year, compared to a 7.9 percent growth rate recorded in 2012, the Ghana Statistical Service (GSS) has said.

Gross Domestic Product (GDP) for the second quarter of the year grew by 6.1 percent year-on-year, while non-oil GDP expanded by 5.8 percent. The total value of GDP amounted to US$44.2billion with a per capita income of US$1,667.

Government, in its budget statement, projected 8 percent end-year growth with support from oil production.

Dr. Philomena Nyarko, Government Statistician who was speaking at a media conference in Accra, explained that the services sector contributed 50.6 percent to the second-quarter growth rate, representing the highest contributor to the total value of GDP. The sector’s growth rate however fell to 9.2 percent from 10.2 percent in 2012.

This was followed by the industrial sector with a growth rate of 2.5 percent, while the agriculture sector showed a negative growth of 3.9 percent. The International Monetary Fund (IMF) has forecast full-year growth of about 7 percent for Ghana in 2013. The Fund has also said government’s budget deficit target of 9 percent of output is under threat from significant challenges during the first seven months of the year.

It said lower-than-expected revenues and overruns in the wage bill, electricity subsidies, and high interest payments on public debt are putting the public finances under stress.

The Bank of Ghana (BoG), which held its policy rate for a second consecutive meeting at 16 percent last week, said the budget deficit in the first seven months of the year was 6.3 percent of GDP against a target of 5.6 percent.

It said total fiscal revenue and grants was GH¢10.4billion, below the target of GH¢12.5 billion -- mainly due to shortfalls in revenue collections and poor disbursement of external grants.

While government responded to the revenue gap by keeping total expenditure below target, spending on wages and interest payments exceeded their targets.

The wage bill, which was the main cause of fiscal dislocation in 2012, amounted to GH¢5.5billion between January-July against a projection of GH¢5.1billion. Interest payments breached its GH¢1.8billion target by GH¢0.8billion.