Zimbabwe Business Watch : Week 30
July 20th, 2009
The business community was greeted with the news of Tendai Biti’s first budget. It more or less lived up to expectation as there was much to encourage a market-driven economy with liberalisation and incentive evident throughout.
At the same time, salaries for civil servants have been increased and an attempt made to keep the cost of basic commodities down with duty exemption extended to December 31st.
Of particular significance is the reduction of Fuel Excise which will reverberate around the economy. More action to re-structure the petroleum/energy sectors is expected.
Biti revised the GDP growth forecast to 3.7% up from 2.8%.
Border agents are reporting an increase in the inbound flow of traffic signalling a rise in demand as the economy slowly grinds its way forward. Some raw material categories are also increasing but viability concerns abound as there is still no end in sight to the financial woes of the dollarised economy.
Potential donors continue to insist that until there are radical and meaningful changes and the issue of the rule of law is addressed, there will be no injection of funds. The Stock Exchange remains muted and the effect of the budget is still to be felt.
