Gross domestic product is seen expanding by 7.4% after contracting by an estimated 4.5% this year, Ncube said in a budget strategy paper presented to reporters and businesspeople on Friday in the capital, Harare. Growth next year will be anchored by agriculture and mining, which forecast to grow by 11.3% and 11% respectively, he said. The country generates the bulk of its foreign currency earnings from exports of tobacco, gold and platinum.
Inflation, which eased to 659% in September — the second straight decline from a July peak of 837% — is expected to reach 134% by year-end, supported by weekly foreign currency auctions, Ncube said.
- The wage bill for government workers will be managed in line with budget capacity and inflation. The target is to contain employment costs below 50% of total expenditure.
- The introduction of a market-based foreign exchange auction system will be supported by the “implementation of strong fiscal and monetary policies for stabilizing inflation, and the preservation of the external value of the local currency.”
- The budget to be presented in November will outline plans to offset the loss of value arising from currency reforms. In February last year the government abandoned the local unit’s 1:1 to the dollar and four months later the Zimbabwean dollar was reintroduced as sole legal tender.