The Ministry of Finance has in its Pre-Budget Strategy Paper (BSP) has projected the country’s economy to drop this year before it regains in 2020.
The BSP projected that the month on month inflation that was said to be around 37 per cent in June would drop to 10 per cent this year before further falling to around 2 at the end of 2020. Part of the BSP reads:
However, in 2020, the economy is projected to turn around building on the success of the ongoing reform initiatives and premised on the following broader assumptions; improved rainfall season, which should enhance agriculture production and electricity generation with trickle-down effects to all other sectors, recovery in aggregate demand, improved foreign currency availability and improved macro-fiscal stability and business confidence. As a result, the economy is projected to grow by 4.6 per cent in 2020.
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The government attributes the economic state of affairs to a cocktail of issues including reduced agriculture yields, Cyclone Idai destruction, the drastic drop in electricity generation and weakening of aggregate demand which all had an impact on other sectors.
Meanwhile, analysts argue that it is important for authorities to instil confidence in the general populace and also to engage all stakeholders in governance issues.
More: The Chronicle