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The government of Ghana has shown a strong revenue performance in the first quarter of 2011, the Bank of Ghana has said. But it also showed an equally strong expenditure performance. The government generated GH�2.2 billion in revenue, representing 4.1% of GDP, the governor of the Bank of Ghana, Mr. Kwesi Amissah-Arthur told journalists at a press conference at the Bank in Accra. He said total Customs collections comprising import duties, import VAT, petroleum taxes and NHIL receipts amounted to GH�807.9 million which is an annual growth of 67.3%. However, government expenditure for the period amounted to GH�2.7 billion, resulting in a narrow deficit of GH�819.2 million (1.5 per cent of GDP) compared with a narrow deficit of GH�621.4 million (1.4 per cent of GDP) for the corresponding period in 2010. Mr. Amissah-Arthur added that excluding arrears clearance of GH�209.9 million, the narrow deficit declined to GH�552.4 million (1 per cent of GDP). Domestic collections of direct taxes and VAT for the period amounted to GH�752.4 million, he said. According to Mr. Amissah-Arthur, the government recorded grants totaling GH�139.2 million and the difference was made up of other revenues to the tune of GH�500.5 million. However, he said, government expenditure within the same period, excluding foreign financed capital expenditure amounted to GH�2.7 billion, and that is 5.2% of GDP. He explained that the deficit of GH�819.2 million, was financed by a net domestic borrowing of GH�570.6 million (1.1 per cent of GDP) and a net foreign loan inflow of GH�248.6 million (0.5 per cent of GDP). Citing decline in inflation, which currently stands at 9.02% in April, and projecting that inflation will remain close to 9% on a year-on-year basis, a factor that will be driven by a sustained and stable macroeconomic environment, anchored on a sound monetary and fiscal policy framework the central bank decided to cut the policy rate by 50 basis points to 13%, he announced.