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Zimbabwe Economy to Record 8.9% Growth in 2013

Finance Minister Tendai Biti said the Zimbabwe economy is expected to grow by 8.9 percent next year if the country’s political environment remains stable and government expenditure is limited within set targets.

In a pre-budget strategy paper released Friday, Biti said inflation is projected to remain around 5 percent while the economy will register a positive growth of 6.7 percent from 2014 up to 2015.

He said these growth targets will also largely depend on the use of multiple currencies introduced by the unity government in 2009.

Biti further said next year’s projected budget will be $3.8 billion, about $200 million more than this year’s budget which was revised downwards due to diminishing tax revenues and limited Marange diamond returns.

Critics like Calisto Jokonya, former president of the Confederation of Zimbabwe Industries, said the projections are overly optimistic.

Meanwhile, the International Monetary Fund (IMF) has proposed that Harare should start taxing civil servants’ salaries so the government can collect additional revenue.

In its annual consultation report, the IMF warned treasury to refrain from giving in to restive workers’ demands for increased salaries.

Civil servants have already indicated that they will go on strike within the next 14 days if the government does not engage them in productive salary negotiations.
The proposed IMF taxation will not increase government revenues significantly but by only a margin of 0.5 percent.

Zimbabwe Congress Trade Unions spokesman Japhet Moyo told VOA Studio 7 the IMF has completely missed the point because it is unimaginable to tax poor state workers.

The IMF said: “Until transparency and regulatory frameworks in the diamond sector are strengthened, Harare should ensure its core budget is financed from other sources.”

Civil servants say they want salary increases commensurate with the country’s poverty datum line currently estimated at more than $590 for an urban family of six.