Budget Day Today

Today Finance Minister Herbert Murerwa is going to announce the 2007 budget. This is going to be most challenging for the hard-drinking former diplomat. The Zimbabwean economic story is not new, as we all experience it in our day to day lives. Journalists will have to look at this critically, as we suspect it might just be a non-event like any other budget in the past few years.

By Reuters
Zimbabwe's embattled government will present its annual budget today week with a traditional prayer for salvation, but analysts say the plan is unlikely to ease a crisis savaging the economy.

Herbert Murerwa, the finance minister, will unveil the 2007 budget in parliament tomorrow for an economy that has shrunk 40% in the last six years.

Economic analysts are not expecting much from Murerwa, who traditionally ends his budget speeches with a plea to God to help save the country, and Robert Mugabe, the Zimbabwean president's government has widely missed all its major targets in the current budget.

"I don't think anyone is expecting a miracle," said John Robertson, the private economic consultant. "On their record, this is another number-crunching exercise, which will be delivered with a lot of promises and a lot of hot air," he said.

Inflation, which the government had hoped to bring down to 80% by this December from over 400% a year ago, has shot up to 1 070.2%. The International Monetary Fund sees it climbing to over 4 000% in 2007.

Off target
The budget deficit, initially forecast to dip to 4.6% of gross domestic product (GDP) from 5% in 2005, is also likely to be way off target after the government adopted a supplementary budget in July, three times the size of the original 2006 budget, citing run-away inflation.

Forecasts that the economy, whose GDP has been shrinking since 1998, would grow up to 3.5% in 2006 have since been revised downwards to 0.3-0.6% growth. Analysts see another contraction in Zimbabwe which the World Bank says has the fastest shrinking economy outside a war zone.

Robertson said the economy was doomed if the government did not address fundamental structural problems, including committing itself to respecting private property rights.

Reuters
Meanwhile NewsNet Reports That Today's Budget Will Provide Some Answers,

Dr Murerwa says enough consultations have been done on the 2007 national budget, with focus now being on stimulating production from all key economic sectors as well as formulation of policies aimed at attracting both domestic and foreign investment.

Dr Murerwa says enough consultations have been done on the 2007 national budget, with focus now being on stimulating production from all key economic sectors as well as formulation of policies aimed at attracting both domestic and foreign investment.

Dr Murerwa made the remarks while addressing a pre-budget stakeholder meeting in Harare.

He said the effective policies will be implemented in the forthcoming budget to deal with unscrupulous business people who either create artificial shortages or unilaterally increase prices for goods.

Murerwa said while the prevailing economic challenges have impacted on the attainment of set objectives, ministries have been urged to live within their budgets.

Dr Murerwa also expressed optimism that with a promising 2006-2007 agricultural season, most of the economic growth targets will be achieved.

Really Doctor???