Finance minister Mthuli Ncube says the introduction of the Transitional Stabilisation Plan has seen government revenue collection surpassing the target while state expenditure kept below the budget threshold
Preseting the state of the economy on Wednesday in the national assembly, Ncube said in the first quarter of 2019, revenue collection surpassed the target while revenue was way below the target.
“On a positive note, there is marked improved performance on central government finances with revenues at RTGs 1.9 billion outperforming the target of RTGs 1.8 billion throughout the first quarter of 2019 to give an overall positive variance of RTGs$ 146 million. On the other hand, expenditures were contained at $1.5 billion against a target of $1.7 billion to give savings of $218.9 million RTGs. This, as a result, gave a budget surplus during this period of $443.1 million RTGs,” Mthuli said.
Ncube said the economy was faced with widespread indiscipline in the foreign exchange market and said this was feeding into inflation.
“The parallel exchange rate market premiums have remained the major source of inflation driving up prices particularly prices of tradable goods. During the quarter, food and non-alcoholic beverages, restaurants, furniture, clothing experienced major price hikes reflecting unethical behaviour by most businesses by way of indexing prices to the parallel market exchange rate. In the outlook, inflation is anticipated to gradually subside as impact of fiscal consolidation and tight monetary policy measures restrain demand. Similarly, the gap between the interbank market and the parallel exchange rate is anticipated to narrow down,” Ncube said.
He ruled out that prices are going to be benchmarked to the USD $ saying the introduction of the RTGs should assist.