Zimbabwe awaits the 2018 national budget with bated breath given various macro-economic factors that prevailed in the economy over the past months.
Economists and industry leaders believe fiscal authorities will have to be bold to pull the country out of the current economic pressures.
Price increases and premiums on foreign currency on the parallel market are factors that have exposed the economy to new pressures, raising fears that they will influence the country’s inflation statistics going forward.
However, these are not the only points of worry for fiscal authorities as they prepare the 2018 national budget.
The growing challenge of illegal imports is also a factor that has stifled the growth of the local manufacturing sector, while aiding to growing trade imbalances within the economy.
Despite the country’s trade deficit narrowing by 5 percent from $1,3 billion in the first half of this year, it still stands within the US$1 billion range, which means the country is still burdened by high imports against low exports.
In the last budget presentation, recurrent expenditure at close to $4 billion and capital expenditure reaching almost $1 billion were among the identified impediments to sustainable economic growth having negative implications to lending capacity to the private sector.
Analysts believe that these are some of the immediate areas of focus for treasury in addition to coming up with lasting solutions to the challenge of foreign currency shortages.
Tax evasion and compliance are also issues that come to the fray, with gaps being identified in the current tax regime.
The state-owned enterprises landscape is another area of concern for fiscal authorities, given revelations that parastatals made a combined loss of $270 million in one year, according to a 2016 report.
Within the context of these challenges, it thus becomes prudent for the government to assume bold measures in the forthcoming budget to ensure sustainable economic growth going forward.