July 20, 2020 / 7:07 AM / 21 days ago

Zimbabwe on course to meet 2020 budget deficit target: finance minister

FILE PHOTO: Zimbabwe Finance Minister Mthuli Ncube arrives to present the 2020 National Budget at Parliament Building in Harare, Zimbabwe, November 14, 2019. REUTERS/Philimon Bulawayo

HARARE (Reuters) - Zimbabwe’s finance minister Mthuli Ncube said on Monday the country was on track to meet its budget deficit target of 1.5% of GDP in 2020 in a key update that was absent from his mid-term budget last week.

Ncube, said he would not seek additional funding this year since the national treasury had spent less than half of its budget despite pressure from the COVID-19 pandemic.

“I am still focusing on a budget deficit of 1.5% of GDP and we are well on our way to achieving that,” Ncube said during a review of the half-year budget held virtually. This would be an improvement on last year’s 4% deficit.

It was not clear why that figure was omitted from last week’s presentation.

Economic analysts are worried that President Emmerson Mnangagwa’s government is trying to balance the budget at the expense of spending more on social services and the health sector, even as it grapples with the coronavirus pandemic.

Zimbabwe is in the grip of its worst economic crisis in more than a decade that has seen a sharp devaluation of its currency and inflation running above 700%, one of the highest in the world.

The government has spooked investors by temporarily shutting the stock exchange saying it was being used to sabotage the economy.

Ncube said the local bourse would only be re-opened once investigations into its activities are concluded in two weeks and the government receives recommendations.

He added that a planned U.S. dollar stock exchange in the resort town of Victoria Falls was set to open next month after parliament enacts a law for its establishment.

Reporting by Macdonald Dzirutwe; Editing by Emelia Sithole-Matarise

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