Harare (New Ziana) – Government now expects economic growth for this year to be a bit slower than the 5.5 percent that was originally anticipated, with the new growth figures set to be announced in July during the mid-term budget review, a Cabinet Minister has said.
Finance and Economic Development Minister Professor Mthuli Ncube said he would present the mid-term budget review on July 28.
“I have the growth forecast figure for 2022, but as is tradition we will announce that formal revision during the mid-term budget review on the 28th of July but suffice to say for now that we will announce a slightly lower growth rate than the 5.5 percent,” he told a press briefing.
Ncube did not reveal the reasons for the lower growth rate, but analysts contend that Zimbabwe’s economy was being affected by the poor agricultural harvest this year and effects of Russia’s special military operation in Ukraine.
In March, the International Monetary Fund predicted that Zimbabwe’s economy would grow by 3.5 percent this year.
For last year, the IMF said sound management of the Covid-19 pandemic, strong agricultural and mining sector growth
had enabled Zimbabwe’s economy to grow by 6.3 percent in 2021, recovering from a cumulative slump of 11.7 percent between 2019 and 2020.
The projection for 2021 by the IMF was higher than the 5.1 percent that the IMF had initially predicted, but was lower than the government’s 7.8 percent projection.
Going forward, the IMF expects the recovery that resumed in 2021 to continue, albeit at a slower pace.
Meanwhile, Ncube said treasury was still assessing whether there was need for a supplementary budget to cater for increases in the government wage bill.
“So far in terms of our assessment these (salary) increases are still within the budget, we are still assessing as to whether we need a supplementary budget or not, but remember a supplementary budget also relies on additional revenue because we have been living within our means.”
The government, has with effect from July awarded its workers a 100 percent salary increment, while negotiations are also ongoing for an additional increase.