Mid-term budget review expected to address resurfacing macro-economic challenges


By Stanley James, Business Editor

FINANCE and Economic Development Minister, Professor Mthuli Ncube will this Thursday present the mid-term budget review which is expected to restore confidence in all sectors of the economy.

The Mid-Term Budget Review will be presented on the back of resurfacing macro-economic challenges.

A combination of high inflation, exchange rate instabilities, global food supply shocks, soaring energy prices and the effects of Russia’s Special Military Operation in Ukraine have not spared the Zimbabwean economy from challenging conditions.

The mid-term budget review is therefore expected to present an opportunity for fiscal authorities to review if the targets are being achieved, identify challenges and provide imminent solutions.

While treasury unveiled a ZWL$927 billion budget for 2022, it is unclear whether the funds are still enough to sustain the economy given the inflationary pressures or whether treasury might resort to a supplementary budget or they will have to do with existing resources.

Furthermore, the need to redistribute resources to strategic sectors is expected in light of the erosion of incomes during the first six months.

Since the tax free thresholds were initially set at ZWL$25 000, market watchers believe the amount is now too short of household demands to such an extent that treasury is expected to announce new income tax free thresholds.

For the business community, it is the need to facilitate tax relief for the mining, agriculture, tourism, retail and distribution that is also imperative in sustaining the economy.

Given the fact that trcommasy had initially projected the economy to grow by five comma five percent this year, Zimbabweans are also keen to assess how treasury will review the forecast.

Measures to further raise revenues during the last half of the year are also a key element that is expected to be addressed by the mid-term budget review statement.

How Zimbabwe balances the act between expenditure and revenue inflows to restore confidence is a key factor that will only be assessed after the presentation of the mid-term budget on Thursday.