3.5 Budget Deficit The budget deficit is a key indicator of macro-economic stability, and it remains a major challenge to government as it aims to improve the welfare of its citizens within a limited budget constraint. In 2011, the country recorded a primary budget deficit of GHC521.71 million, against a planned budget deficit of GHC2,069.64 million. The actual deficit represented 0.9 percent of GDP. The overall budget deficit (cash) amounted to GHC2,459.46 million (4.4% of GDP) in 2011. 3.6 External Sector The external sector recorded relative stability during the year under review in line with other macroeconomic trends, namely inflation, interest rate and inflation. 3.6.1 Exchange Rate Developments in the nominal bilateral exchange rates of the Ghana Cedi against the three core currencies showed that the Cedi depreciated by 5.0, 10.5 and 7.6 percent against the US dollar, the pound Sterling and the Euro respectively in year-on-year terms in December 2011. 3.6.2 Balance of Payments The economy recorded some diversifications in terms of products and new trade destinations. This resulted in increased volume and revenue accrued from international trade. The total merchandise exports in 2011 was estimated at USD12,785.4 million, representing 29.0% over and above the 2011 budget target of USD9,909.0 million. Despite the improvements in the export revenue, the 2011 budget target for balance of payment was missed. The overall Balance of Payment was USD546.53 million in 2011, a decline from 2010 figures of USD1,462.67 million. 3.6.3 External Sector Development Sixth Annual APRM Progress Report: January – December 2011 53