Zimbabwe's economy is expected to slow even further this year, the finance minister said on Thursday, worsening financial difficulties that have triggered a series of anti-government protests. In his mid-year budget speech, Finance Minister Patrick Chinamasa told parliament the economy would grow by 1.2 percent in 2016, from the 1.4 percent forecast earlier in the year.
He said the budget deficit had already overshot the target in the first half of the year at $623 million, and that the shortfall for the whole year could rise above $1 billion. President Robert Mugabe's government is also expecting a slightly lower revenue of $3.76 billion for 2016 from an earlier target of $3.85 billion, Chinamasa said.
In the grip of its worst drought in a quarter century that has left 4 million people facing food shortages, the southern African nation is also running out of cash, forcing the central bank to impose limits on imports and withdrawals from banks.
Economic woes are feeding into frustration among Zimbabweans who have turned to social media to organise anti-government protests against cash shortages, high unemployment of above 80 percent and delays in payment of public sector salaries. "The fiscal position remained under pressure during the first half of the year due to underperfoming revenues and high expenditures that exceeded the target," Chinamasa said. "It is imperative Mr Speaker Sir that we urgently address the wage bill, a major contributor to the growing fiscal deficit that is threatening financial sector and economic stability."