Zimbabwe 2021 mid-term budget and economic review statement in full

21. Merchandise imports are also projected to increase by 11.1% to US$5 245.7 million in 2021, from US$4 719.9 million in 2020, driven by increases in fuel, machinery and raw material imports. Food imports will, however, be lower on account of reduced maize imports, following a good 2020/21 agricultural season.
22. Between January and June 2021, the country received US$746.9 million in diaspora remittances compared to US$288.7 million received during the same period last year. Remittances are projected to continue to drive the current account surplus in 2021, with end year projection of US$1.3 billion.

PUBLIC FINANCES DEVELOPMENTS

23. The 2021 National Budget was premised on revenue projections of ZW$390.8 billion (16.4% of GDP) and expenditures of ZWL$421.6 billion (18.2% of GDP) with a targeted budget deficit of ZWL$30.8 billion (-1.3% of GDP).

Budget Outturn: Jan-June 2021

24. The first half year budget execution indicates continued dividends from the fiscal consolidation measures being pursued since the Transitional Stabilisation Programme (TSP) and these relate to the following:

• Spending within the Budget that has resulted in improved public finances;
• Managing the budget deficit, and hence, the public debt within sustainable levels;
• Supportive monetary policy target on attaining macro-economic stability and growth objectives; and
• Availing more resources towards developmental programmes and projects, including infrastructure, social service delivery and social protection.

25. To that end, for the period Jan-June 2021, revenues are estimated at ZWL$198.2 billion, whilst expenditures were about ZWL$197.6 billion, resulting in an almost balanced budget position, with a small surplus of ZWL$570 million.
26. In the outlook, the budget is anticipated to remain more or less on course assuming limited impact of exigencies and containment of expenditure pressures.

Revenue

27. Cumulative revenue collections for the period January to June 2021 amounted to ZW$198.2 billion against a target of ZW$182.1 billion, resulting in a positive variance of ZW$16 billion or 8.8%. This positive performance was attributed to both tax and non-tax revenues, which were above targets by 5.3% and 392%, respectively.
28. Total revenue collections also include net cumulative foreign currency collections of US$698.5 million (against a target of US$660 million).
29. The major contributing revenue heads were VAT (23%), Corporate Income Tax (20%) and Personal Income Tax (17%).

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