The 2021 Mid-term Budget and Economic Review Speech
Mid Term Budget and Economic Review in Full
2021 Midterm Budget Review Highlights
- Global GDP growth for 2021 projected at 6% up from initial projection of 0.5% growth
- Sub Saharan Africa to grow by 3.4%
- Zim GDP to grow by 7.8% up from 7.4% initial forecast.
- Zim Growth underpinned on good 2020/21 rainfall season, firm international commodity prices, supportive monetary and fiscal measures, intensive vaccination in response to COVID-19
- Higher growth projected for agriculture sector, accommodation services, food services, electricity generation and financial services sector
- Annual Inflation on decline trend 837.5% July 2020 to 56.37% in July 2021.
- Annual inflation expected to decline to between 22-35% by December 2021
- This is due to current exchange rate stability, strong monetary and fiscal policy
- Controlled money growth has helped to stabilize economy
- Banking sector safe in pandemic as it has remained well capitalized
- Balance of Payment has remained strong. Current account balance for 2021 projected to remain in a surplus.
- Exports to increase by 4.2% to 5.4billion(mineral exports to see strong growth)
- Imports to increase by to 11.1 $5.25billion (driven by fuel, raw materials imports)
- US$746.9 million diaspora remittances received in the first 6 months, a significant increase
- ZWL$390 billion revenue projected for 2021 -Jan-June revenue collection at zwl$198.2billion against -Expenditure of zwl$197.6billion
- Budget expected to remain on course for the rest of the year.
- Major expenditures were on compensation of civil servants and capital expenditure, social expenditure in respond to pandemic
- Strategic Grain Reserve so far at 636 884 tons valued at ZWL$20.9 billion, of which 566 751 tons was for maize, 58 212 tons small grains, 11 260 tons soya beans and 661 tons wheat.
- Public debt, domestic debt end of April at ZWL$20.9billion
- On Global Compensation Agreement government engaged UK financial advisor to get advice on financial mobilization
- Interim Relief payments to former farm owners to continue while mobilizing resources for full compensation
- External debt as at December 2020 was US$10.5billion. External debt arrears currently at US$6.9 billion
- Paris club to be paid in the 2nd half of 2021 to strengthen external relationship
Prepared by:A Chingwe,CFU Economist