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2017 growth forecast based on thumbsucking not on realistic macro-model- Mashakada.
13 Dec 2016 at 22:54hrs | Views
Secretary for Finance and Economic Affairs in the MDC-T Tapiwa Mashakada has said the 2017 growth forecast by Zanu PF government was based more on thumbsucking not on any realistic macro-model.
He said the 1.7% forecasted growth rate for 2017 from 0.6% in 2016 will largely depend on the resolution of the liquidity crisis, a surge in productivity, confidence, macro-economic and fiscal stability.
"All these aspects are currently beyond Zanu PF's control. The 2017 growth forecast was based more on thumbsucking not on any realistic macro-model. The projection becomes unrealistic and spurious if you consider the effect of climate variability on Agriculture," he said..
"The economy remains stuck in a deflationary dungeon and the absence of economic stimulus measures such as increasing domestic consumption and gross fixed capital formation is inimical to growth. A capital budget of USD520 million cannot spur growth."
He said a projected budget deficit of USD400 million is inconsistent with a growth mode. A figure of $180 million for paying interest on debt is not compatible with a growing economy. Employment costs gobbling 92% of the total budget blunt economic growth.
"In 2017 the economy is sure to register monthly negative growth rates on the back of fiscal imbalances and a persistent deflation," he said.
He said the 1.7% forecasted growth rate for 2017 from 0.6% in 2016 will largely depend on the resolution of the liquidity crisis, a surge in productivity, confidence, macro-economic and fiscal stability.
"All these aspects are currently beyond Zanu PF's control. The 2017 growth forecast was based more on thumbsucking not on any realistic macro-model. The projection becomes unrealistic and spurious if you consider the effect of climate variability on Agriculture," he said..
"The economy remains stuck in a deflationary dungeon and the absence of economic stimulus measures such as increasing domestic consumption and gross fixed capital formation is inimical to growth. A capital budget of USD520 million cannot spur growth."
He said a projected budget deficit of USD400 million is inconsistent with a growth mode. A figure of $180 million for paying interest on debt is not compatible with a growing economy. Employment costs gobbling 92% of the total budget blunt economic growth.
"In 2017 the economy is sure to register monthly negative growth rates on the back of fiscal imbalances and a persistent deflation," he said.
Source - Byo24News
