Civil servants’ salaries gobble more than 90 percent of government expenditure and this year they have forced the government to overspend by more $1.4 billion.
Finance Minister Ignatius Chombo said this year’s budget deficit is projected at $1.82 billion up from the estimated $400 million.
He said this was not only unsustainable but undesirable. But with the current turmoil within the government and the Zimbabwe African National Union-Patriotic Front, the government is likely to pump out more money to placate the civil servants, especially the security forces.
The bonuses might therefore actually be paid before the end of this year, creating more money from nothing.
Zimbabwe is already on record as being the only country in the world to trash two currencies within a decade.
It trashed its own Zimbabwe dollar and has now trashed the United States dollar.
Official inflation is reported to be about one percent but analysts using the Old Mutual Implied Rate, which is the difference between the share price of Old Mutual on the Zimbabwe Stock Exchange and that on the London Stock Exchange, say inflation is over 300 percent.
The country’s biggest supermarket chain, OK says in its latest financial results its own internal inflation rate for September was at 7.69 percent against the official 0.78 percent.
ZANU-PF is likely to throw caution out of the window as it tries to win the 2018 elections especially because of the turmoil within the party itself and the worsening economy.
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