The founder of the Bullion Group who is also a chartered banker, economist and trade finance specialist, Persistence Gwanyanya (PG), has said that the country is expected to close the year in a position of deficit given the additional budget proposed by the finance minister. Speaking to the Herald’s Deputy News Editor Africa Moyo (AM) in an interview, Gwanyanya said that the country needed to do more in terms of expenditure rationalisation. Below re excerpts from the interview.
AM: Briefly, what is your take on the Mid-Term National Budget Review Statement?
PG: While commendable progress has been made in rebalancing the country’s fiscal and external positions so far, there are significant downside risks that need to be well understood and managed going forward. The achievement of a combination of fiscal and current account surpluses in the first half of the year is so far the greatest progress towards achieving local currency, the Zimbabwe dollar (ZWL), stability, which is a precondition to establishing a strong base for economic recovery.
Importantly, this rebalance will be anchored by measures to deal with economic distortions relating to mainly fuel and utility prices. A review of statutory fees, charges and levies to cost recovery levels was also necessary to deal with distortions and support efficient service delivery by Government and its related entities. However, sustaining the progress made so far is not going to be an easy task as the economy faces significant downside risks that actually necessitated the supplementary budget of ZWL$10.15 billion.
With this additional budget, the economy is expected to close the year in a deficit position of ZWL$4.6 billion (4 percent of GDP), from projected revenue and expenditures of ZWL$18.62 billion and ZWL$14.06 billion respectively. This only means the current fiscal consolidation measures in the form of austerity and revenue-enhancing measures are still very necessary.
More: The Herald
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