Business / Economy
Zimbabwe inflation expected to range between 3.7 and 5%
11 Oct 2011 at 04:47hrs | Views
THE Government is optimistic the economy will continue on a growth path next year, with the rate of inflation expected to range between 3,7 and 5 percent.
In his Budget Strategy Paper, Finance Minister Tendai said macro-economic stability would be maintained through containment of inflation within single digit levels.
He said inflation management would be supported by continued implementation of prudent economic policies that include cash budgeting and use of multiple currencies.
"Furthermore, domestic capacity utilisation is projected to increase to around 60 percent, thereby reducing imports, particularly for basic commodities as well as exposure from fluctuations of the US dollar against the South African rand," he said.
Minister Biti said developments on the macro-economic front during the first half of 2011 reflected that the economy was on the right track.
This year, inflation was expected to close at 3,5 percent, despite inflationary pressures in the form of power tariff increases and the fall of the US dollar against the rand.
Economic analysts added that management of the economy enhances industrial competitiveness in both regional and global market places.
Global competitiveness is in line with Government's medium term objective of consolidating macro-economic stability - that way facilitating increased capacity utilisation, economic growth and development of the country.
However, despite the projected growth, the economy faced a number of threats, mainly the financial sector's vulnerabilities, volatility in commodity prices, unsustainable current account deficit and wage bill pressures.
In 2012, Government is expected to collect $3,4 billion in revenues and Value Added Tax and Pay As You Earn are expected to be the major drivers.
The revenue to GDP is expected to grow from 30 percent to about 34 percent on account of ongoing tax reforms focusing on Zimra restructuring, compliance initiatives and increased automation of the tax collection system.
Minister Biti said during the year, the country's economy was expected to expand between 7,8 and 9 percent.
Agriculture and mining sectors would be the key drivers to overall growth with the tourism, manufacturing, transport and communication sectors increasing their contribution.
In 2011, the economy is expected to expand 9,3 percent.
During the same period, exports are expected to increase by 11 percent to $4,6 billion from $4,1 billion.
Minister Biti said no significant support is expected from co-operating partners in 2012, which would further affect the performance of the economy, already facing serious liquidity challenges.
The strategy paper is a preliminary to the actual budget to allow broader participation by stakeholders.
In his Budget Strategy Paper, Finance Minister Tendai said macro-economic stability would be maintained through containment of inflation within single digit levels.
He said inflation management would be supported by continued implementation of prudent economic policies that include cash budgeting and use of multiple currencies.
"Furthermore, domestic capacity utilisation is projected to increase to around 60 percent, thereby reducing imports, particularly for basic commodities as well as exposure from fluctuations of the US dollar against the South African rand," he said.
Minister Biti said developments on the macro-economic front during the first half of 2011 reflected that the economy was on the right track.
This year, inflation was expected to close at 3,5 percent, despite inflationary pressures in the form of power tariff increases and the fall of the US dollar against the rand.
Economic analysts added that management of the economy enhances industrial competitiveness in both regional and global market places.
Global competitiveness is in line with Government's medium term objective of consolidating macro-economic stability - that way facilitating increased capacity utilisation, economic growth and development of the country.
In 2012, Government is expected to collect $3,4 billion in revenues and Value Added Tax and Pay As You Earn are expected to be the major drivers.
The revenue to GDP is expected to grow from 30 percent to about 34 percent on account of ongoing tax reforms focusing on Zimra restructuring, compliance initiatives and increased automation of the tax collection system.
Minister Biti said during the year, the country's economy was expected to expand between 7,8 and 9 percent.
Agriculture and mining sectors would be the key drivers to overall growth with the tourism, manufacturing, transport and communication sectors increasing their contribution.
In 2011, the economy is expected to expand 9,3 percent.
During the same period, exports are expected to increase by 11 percent to $4,6 billion from $4,1 billion.
Minister Biti said no significant support is expected from co-operating partners in 2012, which would further affect the performance of the economy, already facing serious liquidity challenges.
The strategy paper is a preliminary to the actual budget to allow broader participation by stakeholders.
Source - TH
