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‘Economy to grow by 7,4%’

FINANCE minister Tendai Biti sees the economy growing by 7,4% next year buoyed by a good agricultural season, peaceful and uncontestable election outcomes as well as firm commodity prices.

Report by Staff Writer

Addressing a government works programme review this week, Biti said Zimbabwe should implement agreed policies, such as a flexible Indigenisation Act, in order to promote macroeconomic stability, attract foreign direct investment (FDI) and attain growth targets.

“We should also service our sovereign debt and continue with implementation of Zimbabwe Accelerated Arrears Clearence, Debt and Development Strategy to mitigate the downward risks,” he added.

Government, Biti said, should also cut its wage bill, which currently constitutes about 70% of expenditure at the expense of social development investment, through implementation of the civil service audit.

Biti, however, said the country’s economy could fall by 7,4% in 2013 if the principals — President Robert Mugabe and Prime minister Morgan Tsvangirai —  in government fail to guarantee peaceful polls.

Key aspects of the 2013 national budget, as presented by Biti, will include consolidating the gains of the past three years such as macroeconomic stability and fiscal consolidation.

“It (the 2013 national budget) must pursue the unfinished reform agenda of parastatal reform, labour market reform, pension reform, legislative reform, security of tenure, commodity exchange, Public Private Partnerships legislation, state procurement reform,” he said.
Government revenues are expected to rise to US$3,8 billion compared to US$3,6 billion estimated at the end of 2012 and equal to budgeted expenditure for the two periods.

Export of goods and services are expected to amount to US$5,5 billion while imports are seen reaching US$8,4 billion, representing a current account balance of US$2,9 billion.

In the current year, Biti revised the projected economic growth figures downwards to between 4% and 5%, from the mid-term budget review of 5,6% from the initial 9,4% beginning of year, in light of the new base information for 2011 GDP and some revisions in minerals output.

Biti’s revision is in line with the International Monetary Fund’s projections that Zimbabwe’s economy would grow by only 4% as a result of inadequate revenue inflow.

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