FINANCE Minister Tendai Biti on Wednesday predicted a “doom” mid-term economic review which will reflect how economy growth has slowed down during the second quarter of the year.
Biti said he expected to present probably his last Mid-Term fiscal policy under the inclusive government early next week after postponing it to attend to Movement for Democratic Change (MDC) issues ahead of the elections scheduled for July.
“I had to postpone the Mid-Term fiscal policy (this week) to attend party matters as Secretary General (of the MDC-T) so that we have harmonized elections whose results would steer the economy forward,” Biti said.
“In terms of economic growth as a country we lost three points during the first quarter of the year, you will surprised or shocked rather buy what I will present next week … My point is we should not destroy our economy because of an election which happens for a day,” he said.
Analysts said the fiscal policy review needed to focus on the reduction of government expenditure although most conceded Biti faced a nearly impossible task achieving that goal since the bulk of the country’s tax revenues were going towards civil servants’ salaries.
They said Biti should also consider the resuscitation of functional money markets to ease the liquidity crisis adding this could be through trade-able bills as well as restoring the central bank’s lender of last resort function.
In November last year, Biti presented a US$3,8 billion budget describing it as the most difficult to construct in the short life of the inclusive government.
He said numerous downside risks, including potential political instability, threatened his budget objectives
“Multitude of challenges are facing the economy and requires a fundamental re-think of the state, economics and development in Zimbabwe,” he said.
Biti revised Gross Domestic Product growth for 2012 to 4,4 percent from the 5,6 percent he had set during his mid-term fiscal policy review in June last year after the initial 9,4 percent forecast.
Some analysts felt Biti could further revise down this year’s economic growth which had been projected at about 5 percent
Biti has also admitted experiencing nightmares as he tries to resolve a shortfall of about US$85 million needed for general elections just three weeks away.Advertisement
On Wednesday he said about US$130 million was expected to fund the whole election process.