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Zimbabwe to slash budget deficit by half in 2018, growth seen at 3pct

18/10/2017 00:00:00
by Source.co.zw
 
New finance minister Ignatius Chombo
 
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HARARE: Zimbabwe is targeting to half its budget deficit to four percent of the country’s Gross Domestic Product (GDP) next year, with growth expected to slow to 3 percent, according to a treasury strategy document seen by The Source. 

The deficit has risen sharply from 1.2 percent in 2014 to 8,7 percent in 2016 and is seen at 8.4 percent this year as the southern African country struggled to rein in expenditure.

2016 and 2017, respectively but according to the document the southern African country is targeting to balance its budget by 2020.

However, Treasury expects the deficit to fall by half next year but warns that in the absence of “strong measures targeted at containing expenditures and enhancing revenues, further deterioration of the deficit is likely to be sustained beyond 2018.”

Economic growth is seen slowing down to 3 percent from this year’s 3,7 percent before picking up to 4,4 percent in 2019 and 4,5 percent in 2020.

“Forecasts of improved economic growth are on the back of recovery in commodity prices, in particular mining. In agriculture, output growth will be underpinned by scaled up coordination and funding from Government and the private sector and increased investment in irrigation development. Improved power generation will also benefit from completion of construction works at Kariba South Extension Plant,” said Treasury.

Zimbabwe’s total outstanding public and publicly guaranteed debt, currently at $13,1 billion, is seen rising to $14 billion next year and peaking at $14,8 billion in 2020.

“In the absence of sustained fiscal discipline and strong expenditure containment policy measures, the pointers are of a worsening position over the period 2018-2020,” it added.



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