The Ministry of Finance and Economic Development has released the 2019 April Consolidated Financial Statements. To download the file Click Here
The Managing Director of the IMF approved on May 15, 2019, a Staff-Monitored Program (SMP) for Zimbabwe, covering the period of May 15, 2019 to March 15, 2020.
Zimbabwe faces deep macroeconomic imbalances. After moving to full dollarization in late 2008 to break a period of hyperinflation, fiscal deficits increased substantially during 2016 –18, financed by the issuance of quasi-currency instruments nominally at par to the US dollar and the continued accumulation of external arrears. The fragile equilibrium was maintained through exchange controls and other restrictions on access to foreign exchange, providing a deep distortion for economic activity.
The new government that assumed office following the July 2018 elections is committed to addressing the macroeconomic imbalances, removing structural distortions to facilitate a resumption in growth, and to re-engaging with the international community including by clearing its external arrears. The authorities have elaborated a comprehensive structural reform program—the Transitional Stabilization Program—to address structural rigidities in the economy while also taking key steps to address the macroeconomic imbalances by halting the issuance of quasi-currency instruments to finance the deficit (since September 2018) and introducing a new domestic currency in February 2019.
The SMP is designed to support the authorities’ reform agenda. The SMP will be monitored on a quarterly basis, and is intended to assist the authorities in building a track record of implementation of a coherent set of economic and social policies that can facilitate a return to macroeconomic stability and assist in reengagement with the international community.
Economic policies under the SMP emphasize the restoration of macroeconomic and financial sector stability through: implementing a large fiscal adjustment, the elimination of central bank financing of the fiscal deficit, and adoption of reforms to allow the effective functioning of market-based foreign exchange and debt markets. Structural reforms include steps to reform and privatize state owned enterprises, enhance governance including in procurement and revenue administration, and to improve the business environment. The SMP also includes important safeguards to protect the country’s most vulnerable people.
Risks to the SMP are high, including due to the materialization of two external shocks—the El Niño related drought impacting both agricultural production and electricity supply as well as the extensive damage caused by Cyclone Idai in March. The impact of these two shocks complicate an already difficult near-term economic outlook as the economy adjusts to the new policy regime. To mitigate the potential risks from capacity constraints, the IMF will support the authorities’ efforts in all policy areas covered by the SMP through tailored technical assistance.
To download the IMF Press Release and Staff Report CLICK HERE
The 2019 Budget Thrust is macro-fiscal stabilisation and laying a solid foundation for attaining the triple 'S' growth - strong, sustainable and shared.
- A budget surplus of RTGS$443.1 million was realised during the first quarter of 2019.
- Revenue collection outperformed targets by 8.2%, recording RTGS$1.9 billion.
- Expenditure was contained and stood at RTGS$1.5 billion, 11.8% below planned spending.
- Government earmarked RTGS$100 million towards mitigating the impact of Cyclone Idai.
- Month on month inflation averaged 5.6% during the quarter, down from 11.5% during the last quarter of 2018.
- Market capitalisation of the ZSE decreased by -17.2% since the beginning of the year, standing at US$16.8 billion at the end of the quarter.
- Due to drought and damages caused by cyclone Idai, agricultural production for the 2018/19 agricultural season is expected to decline substantially.
- Mineral output targets remain achievable, as most key minerals’ first quarter production constituted more than 20% of total expected output of the year.
- Electricity generation during the first quarter of 2019 was lower compared to the same period in 2018 because of lower water allocation at Kariba hydro power station.
- Merchandise exports reached US$938.1 million, 5.9% more than in the first quarter of 2018.
- The trade deficit for the first quarter of 2019 stood at US$165.9 million, constituting a 57% improvement from the fourth quarter of 2018.
To download the 2019 First Quarter Treasury Bulletin, CLICK HERE
The Minister of Finance and Economic Development, Hon. Prof. Mthuli Ncube presented the Gear and Levers for Achieving a Prosperous and Empowered Upper Middle Income Society by 2030 at the 2019 Zimbabwe International Trade Fair. To read more, CLICK HERE to download the file.
IMF staff and the Zimbabwean authorities have reached agreement on macroeconomic policies and structural reforms that can underpin a Staff Monitored Program. The SMP aims to implement a coherent set of policies that can facilitate a return to macroeconomic stability.