Biti: Zim Economic Outlook Bleak

Presenting his 2013 budget on Thursday afternoon, Biti said 2013 looks bleak as the country battles with global recession, financial instability and a poor business climate.
Biti said the 2013 budget is demand driven, with people calling on government to address issues with regards to the country’s political and economic environment.
He also revised 2012 gross domestic product (GDP) growth rates further downwards to 4.4%, from his earlier revision to 5.6% from 9.4%. In 2013 GDP is expected to grow by 5%.

“We need to come up with policies and new reform measures that stimulate growth and follow them if economic growth is to improve,” said Biti.

Biti said the budget’s success hinged on rainfall patterns, but the biggest risk was a violent election similar to what transpired in 2008

“If that happens it will be a case of making two steps forward and 20 steps backwards,” said Biti, who said the budget, was the last under the Government of National Unity.

Biti said growth momentum will be underpinned by expansion in finance, mining, tourism, agriculture, manufacturing and transport sectors.

The Finance minister said imports remained very high for a small economy like that of Zimbabwe.

Biti also made provisions for the country’s referendum, and elections scheduled next year.

He further emphasised the need for political stability in the country saying the absence of the rule of law puts a damper of the country’s prospects of realising total economic growth.

Budget Highlights:

•    Bonus tax free US$1000
•    No banks charges if bank balance is US$800 and below.
•    Life expectancy now 41 years
•    150 million kg of tobacco is targeted.
•    17 000 metric tonnes of wheat expected from 100 000 metric tones
•    Mining industry capable of raising US$14 billion dollars annually.
•    Police road block too much in Zimbabwe and the issue need to be urgently                 reviewed
•    Loan to deposit ratio at 75 percent
•    Roads need attention
•    Workers over-taxed
•    Civil servant salary to be reviewed in line with inflation.
•    Government to promote E-tourism.
•    20 million dollar line of credit to SMEs

News 24/Radio VOP