Murerwa left everything to Gono

Finance Minister Hebert Murerwa presented a 2004 budget that was more remarkable for what it omitted than what it included, leaving everything to new central bank governor Gideon Gono.

Gono was expected to unveil his first monetary policy statement in mid-December.

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Viewing cable 03HARARE2268, 2004 budget: Quick Readout

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210823Z Nov 03

UNCLAS HARARE 002268

SIPDIS

STATE FOR AF/S

NSC FOR SENIOR AFRICA DIRECTOR JFRAZER

USDOC FOR 2037 DIEMOND

TREASURY FOR OREN WYCHE-SHAW

PASS USTR FLORIZELLE LISER

STATE PASS USAID FOR MARJORIE COPSON

¶E. O. 12958: N/A

TAGS: ECON EFIN EINV PGOV ZI

SUBJECT: 2004 budget: Quick Readout

Yesterday’s 2004 budget announcement is more remarkable

for what it omits than includes. On almost every

significant issue – particularly devaluation and anti-

inflation measures – Finance Minister Herbert Murerwa

punts the ball to incoming Reserve Bank Governor Gideon

Gono, who will issue his own policy statement in mid-

December. Murerwa said the GOZ “will rigorously

implement fiscal and monetary stabilization measures,”

but did not spell any out in the 139-paragraph prepared

text. The GOZ did not even venture an inflation

projection, only that it would “dissipate . . . in

response to [unspoken] monetary and fiscal measures to be

implemented in 2004.” Murerwa did forecast negative 2004

growth of 8.5 percent, down from 13.2 percent this year,

and raise the tax threshold to account for bracket creep

– a no-brainer given the current inflation rate. We will

provide a more detailed budget analysis next week.

Sullivan

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