Movement for Democratic Change-Tsvangirai Shadow Minister for Finance Tapiwa Mashakada says Zimbabwe is likely to remain stagnant next year as a capital budget of only $520 million cannot spur growth.
“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,” Mashakada says.
Mashakada was commenting on the $4. billion 2017 budget for Zimbabwe presented by Finance Minister Patrick Chinamasa last week. Chinamasa said he expected revenue of $3.7 billion.
“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.
“A projected budget deficit of USD400 million is inconsistent with a growth mode. A figure of USD180 million for paying interest on debt is not compatible with a growing economy. Employnent costs gobbling 92% of the total budget blunt economic growth.”
Full statement
Tuesday, 13 December 2016
Zimbabwe 2017 national budget comments (part 1) by Dr. Tapiwa Mashakada
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.
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.
A projected budget deficit of USD400 million is inconsistent with a growth mode. A figure of USD180 million for paying interest on debt is not compatible with a growing economy. Employnent 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.
Tapiwa Mashakada
Secretary for Finance and Economic Affairs
Movement For Democratic Change
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