* Ghana presents supplementary budget on Wednesday
* Cuts 2014 overall economic growth forecast to 7.1 percent
* Raises 2014 budget deficit target to 8.8 percent/GDP
(Adds quotes from FinMin speech, background)
By Kwasi Kpodo
ACCRA, July 16 Ghana cut its 2014 economic
growth target and forecast a wider budget deficit and higher
inflation due to falling revenues, the slide of the cedi
currency and declining gold prices, the finance minister said on
The West African nation's budget gap will rise to 8.8
percent of gross domestic product, compared with an initially
targeted 8.5 percent, Seth Terkper said as he presented a
supplementary budget to parliament.
He said the government now expected economic growth of 7.1
percent this year, down from an initial 8 percent, and a
year-end inflation rate of 13 percent plus or minus 2 percent,
compared with an earlier 9.5 percent forecast.
Ghana's gross international reserves at the end of the year
are expected to be enough to cover not less than 3 months of
imports, up from 2.5 months in June, he said.
Terkper said the government was seeking parliament's
approval for 3.1 billion cedis ($935 million) in additional
spending for the year to complement the 34.9 billion cedi 2014
"The economy has experienced a number of pressures, which
continue to pose challenges to the attainment of our 2014
economic targets," he said, citing higher interest costs and a
shortfall in external inflows as factors leading to the
The West African state, which exports gold, cocoa and oil,
is seen as one of Africa's brightest prospects because of its
stable democracy and strong growth in the past.
But the government is under pressure to stabilise public
finances, especially a stubborn budget deficit and increasing
public debt, while the cedi has slumped around 30 percent
against the U.S. dollar since January.
The country's public debt amounted to 54.8 percent of GDP at
the end of May.
Terkper said that despite the challenges, Ghana's
short-to-medium term economic prospects remained positive.
"We are presenting the supplementary estimates to ensure
that we maintain the pursuit of our growth and macro-economic
stability agenda," Terkper said.
"It has therefore become necessary to make adjustments to
accommodate higher interest costs due to rising interest rates
and exchange rate depreciation," he added.
Ghana is set to issue a third Eurobond of up to $1.5 billion
later this month for government finances.
($1 = 3.3120 cedis)
(Writing by Bate Felix; Editing by David Lewis and Hugh Lawson)