Zimbabwe’s Finance and Economic Development Minister Mthuli Ncube today went against expectations and avoided announcing a supplementary budget.
This maintains the 2020 National Budget at the $63 billion set in November 2019.
Minister Ncube said it was key that the government maintains fiscal discipline, despite expectations that the Covid-19 pandemic would force the Zimbabwean authorities to spend.
The decision not to supplement the 2020 National Budget was also buttressed by the fact that ministries had so far only utilised about 46 percent of their 2020 budget allocations.
Announcing the Mid Term Fiscal Policy Review this afternoon, Minister Ncube said Zimbabwe’s gross domestic product (GDP) this year is projected to contract by – 4.5%.
Notwithstanding the projected contraction, the Finance Minister said Zimbabwe is likely to close the with a positive current account balance.
“The anticipated surplus is also on account of measures on containing non-essential consumptive imports,” he said.
He added that goverment interventions and external support had helped reduce the expected level of economic contraction this year.
“A combination of government intervention and external development support in mitigation of the Covid-19 pandemic is expected to alleviate deeper contraction of the economy to a projected -4.5% in 2020, against the initial Budget projection of 3% growth,” said the Minister.
“In the absence of the above stimulus package and assuming prolonged and severe impact of the crisis, the economy would contract severely.”
Minister Ncube said economy would rebound in the long run, with an anticipated 7.4% GDP growth in 2021.