Zimbabwe: Mthuli Ncube Projects 10 Percent Inflation Decline By Year End

Opposition leader Nelson Chamisa and President Emmerson Mnangagwa.

Finance Minister, Mthuli Ncube says the inflation rate will end the year 2019 at 10% with an expectation that it will reduce further to a single digit by the end of 2020.

According to the 2020 pre-budget strategy paper the Treasury boss hinged the inflation decline prediction on the strengths of outlawing the multi-currency basket.

"Following the adoption of mono currency in June 2019, supported by further strengthening of both fiscal and month-on-month inflation retreated to 21% by July 2019 and further down to 18% by August 2019.

"With continued implementation of fiscal and monetary policy reforms and other structural policies, inflation on monthly basis is expected to stabilise around 10 % by end 2019 and at 2.3 % by end of 2020."

The remarks come shortly after the International Monetary Fund's recent report indicating Zimbabwe's monthly inflation reached 300 % in the month of August this year, becoming the highest globally.

Ncube predicts further that Gross Domestic Product is projected to grow by 5% to $209.3 billion in 2020, as revenues are expected to hit $24.8 billion with expenditure estimated at $28.5 billion creating a budget surplus of $4.1 billion.

The strategy paper claims that cumulative merchandise exports for 2019 up to July increased by 7.2%, from US$2 billion during the same period in 2018, to $2.1 billion despite a decrease in gold exports, and largely on account of nickel and tobacco.

At the same time, merchandise imports for the period under review sharply declined by 21%, from US$3.6 billion recorded in the comparable period in 2018, to US$2.8 billion in 2019.

However, in 2020, exports are projected at US$5.5 billion with imports growing to US$6.6 billion on account of higher imports of essential inputs and equipment, including electricity and fuel.

Cumulative revenue collections for the first half of the year 2019 stood at $4.99 billion, against a target of $4.15 billion, giving a positive variance of 20.2%.

Similarly, expenditures for the same period were $4.2 billion, against a target of $3.7 billion, which is $532 million over expenditure of 15%.

A positive rainfall season forecast combined with the above factors, is expected to see agriculture rebound and growth of 10.3% in 2020 against a backdrop of sustained growth and stability.

Added Ncube: "While the 2020 national budget will continue to consolidate macro-fiscal stabilisation gains made in 2019, the thrust will now shift to the following areas, growth and productivity; job creation; competitiveness; and promotion of more sustainable and shared development."

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