The Sunday News
Judith Phiri, Business Reporter
Finance and Economic Development Minister, Professor Mthuli Ncube, says the annual inflation is expected to decline further by end of August and further to between 22 percent and 35 percent by December this year.
Zimbabwe’s annual inflation for the month of July 2021 slowed down to 56,37 percent, from 106,64 percent in June, latest figures show. Presenting the midterm budget review statement in Parliament this afternoon, Prof Ncube said:
“The annual inflation is expected to decline further by end of August 2021 and further to between 22 percent and 35 percent by December 2021. Treasury and the Central Bank will continue to pursue strong monetary and fiscal policies that sustain the current disinflationary path.
“The domestic GDP growth for the year 2021 is projected to remain strong at 7.8 percent, slightly above the 2021 National Budget growth forecast of 7.4 percent. The strong rebound of the economy is anchored on better 2020/21 rainfall season, higher international mineral commodity prices, stable macroeconomic environment and Covid-19 pandemic response measure, including vaccination programme.”
The Minister said in 2021, reserve money growth target per quarter was lowered from 25 percent in 2020 to 22.5 percent, in order to send a strong signal to the market that Government will do whatever it takes to stabilise the economy.
While remittances are at US$746.9 million in the first half of 2021 and are projected to continue to drive the current account surplus in 2021, with end year projection of US$1.3 billion. In the outlook, Prof Ncube said the budget is anticipated to remain more or less on course assuming limited impact of exigencies and containment of expenditure pressures.
Moreover, in the outlook to December 2021, he said the budget expenditure target of $421.6 billion will be maintained as they try to contain expenditures, save for exigencies managed through reallocations, where necessary.
“There is need to stay the course. Therefore, there are no policy changes. Existing policies are achieving the desired results and are still adequate. We only need to stay the course, and any substantial policy changes will be introduced through the 2022 Budget,” said Prof Ncube.
The Minister has projected higher growth rates projected in agriculture, electricity generation, manufacturing as well as financial services.
“Growth of the agriculture sector in 2021 has been revised upwards on account of higher-than-expected performance of almost all crops particularly maize, groundnuts, and sorghum. The sector is, therefore, estimated to grow by 34 percent, up from the original Budget projection of 11 percent.”