…as Gvt continues to pursue strong monetary and fiscal policies
According to the 2021 Mid-Term Budget and the Economic Review, the country’s economic performance remains strong as inflation continues to drop while the Gross Domestic Product (GDP) remains firm.
Speaking during a presentation in the Parliament of Zimbabwe, Minister of Finance and Economic Development, Prof Mthuli Ncube highlighted that despite the challenges posed by the Covid 19 global pandemic, the country has been able to increase its GDP and significantly reduce inflation.
“Mr Speaker Sir, the domestic GDP growth for the year 2021 is projected to remain strong at 7.8%, slightly above the 2021 National Budget growth forecast of 7.4%,” said Prof Mthuli
In addition Prof Ncube expounded on how Government was able to strengthen the country’s GDP. He said, “The strong rebound of the economy is anchored on better 2020/21 rainfall season, higher international mineral commodity prices, stable macroeconomic environment and Covid19 pandemic response measures, including the vaccination program.
“Higher growth rates are projected in agriculture, electricity generation, accommodation and food services, as well as financial services,” said Prof Ncube.
Commending Government’s implementation of fiscal and monetary measures that have seen inflation falling since the new dispensation came in.
“Fiscal and monetary consolidation measures being implemented by Government to date have managed to firmly anchor inflation expectations as shown by a significant decline in inflation from 837.5% in July 2020 to 106.6% in June 2021. The July year on year inflation is 56.37% and 2.56% for month on month inflation.
“Month on month inflation is expected to remain stable at less than 3% during the second half of 2021 and further to between 22% and 35% by December 2021,” Prof Ncube said.
Pledging his support and that of his team at the Ministry of Finance and Economic Development and those at the Reserve Bank of Zimbabwe to sustain the current disinflationary path, Minister Ncube said, “Mr Speaker Sir, the current price and exchange rate stability will go a long way in supporting industry in making long term investment decisions and allow for the efficient allocation of resources.”
He further added that, “Treasury and the Central Bank will continue to pursue strong monetary and fiscal policies that sustain the current disinflationary path.
Meanwhile, Government has recorded financial successes since the Transitional Stabilisation Program (TSP) by implementing policies meant to resuscitate the economy such as spending within the budget resulting in improved public finances; Managing the budget deficit, and hence the public debt within sustainable levels; supportive monetary policy target on attaining macro-economic stability and growth objectives and availing more resources towards developmental programs and projects, including infrastructure, social service delivery and social protection.