Prices to start falling next month – Ncube

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Government’s fiscal consolidation measures and other initiatives introduced into Zimbabwe’s economic programmes should see prices of goods starting to drop from next month, Finance and Economic Development Minister Professor Mthuli Ncube has said.

In a pre-recorded Governors’ Statement released here during the 54th Meeting of the Boards of Governors of the African Development Bank and the 45th Annual Meeting of the African Development Fund currently underway at the Sipopo Conference Centre, Professor Ncube said the reforms introduced under the Transitional Stabilisation Programme were starting to bear fruit.

“The reforms being implemented by Government under the Transitional Stabilisation Programme of October 2018 to 2020, are beginning to show positive developments as the twin deficit challenge of the fiscal and the current account are coming under control.

“Government has started realising a budget surplus. On the other hand, with regards to prices, fiscal consolidation measures, reinforced with a tight monetary stance together with liberalisation of the exchange rate are containing inflationary pressures which are expected to slow down in the third quarter of the year,” he said.

He said the positive trajectory was achieved through containing expenditures by reducing the wage bill and plugging revenue leakages through improving the Zimbabwe Revenue Authority (ZIMRA)’s Tax Management Revenue System, and revenue enhancement measures such as a two percent intermediate money transfer tax, among others.

The 2019 Budget, Professor Ncube said, primarily targeted macro-economic and fiscal stabilisation and implementation of quick win flagship and high impact projects and programmes, which will lay a solid foundation for private sector led growth.  He however, reiterated that the 2019 GDP growth rate was expected to be weighed down due to unfavourable El-Nino induced drought, the devastating Cyclone Idai, foreign currency shortages and constrained spending being imposed by fiscal reforms.

“In addition, challenges in fuel and electricity availability are also factors weighing down economic performance,” he said.