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Finance Ministry Says Deflation Crippling Zimbabwe Economy

The economy is free-falling under Finance Minister Patrick Chinamasa and his Zanu PF government due to lack of foreign direct investment and other factors.
A new report by the Ministry of Finance is forecasting a dire economic outlook for Zimbabwe this year as deflation is expected to continue.

The monthly report titled, “Treasury State of the Economy” says the deflationary pressures experienced during February will continue to affect the economy in 2014, due to an extending negative output gap.

Year-on-year inflation declined from the 0.41 percent recorded in January 2014, to -0.49 percent in February.

In another round of bad news for the economy, the Treasury report says the government missed its revenue collection target.

Revenue collections during the month of February 2014 amounted to US$248 million against a target of US$273.26 million resulting in a negative variance of US$25.3 million.

The report says 58 percent of the revenue was gobbled by salaries.

Many companies are also said to be closing shop and the Zimbabwe Stock Exchange was being affected by dwindling foreign investor participation.

Independent economic consultant John said the government is losing the inflation war.