Highlights of 2022 Mid-Term Economic Review & Supplementary Budget

Finance and Economic Development Minister Mthuli Ncube on Thursday presented the 2022 Mid-Term Budget and Economic Review in Parliament. Here are the highlights:

  1. Reserve money stock has increased to ZW$33.6 billion as of 30th June 2022, largely due to growth in statutory reserves in line with the thrust of tightening monetary policy.
  2. The annual growth in broad money was largely driven by increases of 316.9% and 286% in credit to the private sector and net claims on Government, respectively.
  3. Zimbabwe’s balance of payments remains favourable with a current surplus of US$387.1 million having been registered during the first half of 2022.
  4. The gold coins are tradable, highly liquid and can be used as collateral security.
  5. Merchandise exports and imports increased by 33% and 15% to US$3 516.5 million and US$3 746.8 million, respectively, during the first half of 2022, compared to the same period in 2021.
  6. Exports are expected to reach US$7.3 billion, spurred by increases in mineral receipts benefitting from the mineral commodity price boom, as well as increases in agriculture and manufactured exports.
  7. 2022 National Budget was premised on revenue collections of ZWL$850.8 billion (16.8% of GDP), expenditures of ZWL$968.3 billion and a target budget deficit of ZWL$76.5 billion (1.5% of GDP). Unaudited outturn during the first half indicates revenue collections of ZWL$506.6 billion, against expenditures of ZWL$534.5 billion. This has resulted in a budget deficit of ZWL$27.9 billion, against a target deficit of ZWL$45 billion.
  8. As at end of June 2022, public and publicly guaranteed debt stood at ZWL$1.3 trillion and US$13.2 billion, comprised of domestic and external debt, respectively.
  9. Budget Transparency Performance, the country is doing well in terms of budget transparency and is now ranked 3 in Africa, after South Africa and Benin. Globally, the country is ranked 41 out of 120 countries according to the International Budget Partnership (IBP) latest Report.
  10. Revenue collections to year-end are now projected at ZW$1.7 trillion while expenditures are now estimated at ZWL$1.9 trillion. This is against the approved Budget of ZWL$968.3 billion, entailing additional spending of ZWL$929 billion.
  11. The bulk of the Supplementary Budget (53%) is going towards employment costs to cushion public servants against the increasing cost of living. The balance of additional resources are going towards meeting Government consumables (18%),capital projects (19%) & social benefits (7%).
  12. Tax-Free Threshold was increased to ZW$300,000 or USD1,200 per annum for remuneration earned in local and foreign currency, respectively, with effect from 1 January 2022.
  13. Tax Relief Measures, Threshold on local currency remuneration from ZW$300,000 to ZW$600,000 per annum and also adjust the tax bands to end at ZW$12 million from the current ZW$6,000,000 per annum, above which tax is levied at a rate of 40 percent, with effect from 1 August 2022.
  14. Bonus Tax Free Threshold: I also propose to review the local currency tax-free bonus threshold from ZW$100,000 to ZW$500,000 with effect from 1 November 2022.

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