Inflation will be below 10% by year-end: Mthuli Ncube
FINANCE and Economic Development Minister Mthuli Ncube says annual inflation is expected to slow down to below 10 percent by the year-end on expectations that the government will cut the budget deficit by half, and reduce money supply growth.
“The target for 2019 is ambitious, but attainable: To reduce the budget deficit from about 12% of gross domestic product to 5%. Over the past four months, we have made significant cuts to expenditure in five main areas: First, we have ended the unsustainable practice of issuing Treasury Bills to finance the deficit, forcing us to spend within our means and within the budget,” he said in an opinion piece.
He added: “Second, we have reduced the public wage bill by cutting salaries of senior government officials by 5% across the board, retiring over 3 000 youth officers, and establishing a more modest bonus system for civil servants that saved over US$75 million in 2018 alone.
“Third, we have diverted our resources to pressing areas by freezing the hiring of non-critical staff, while hiring 3 000 additional staff in the education sector and almost 2 000 in the health sector. Finally, we have cut unnecessary expenditure and ‘perks’ for ministers and Members of Parliament, most notably by suspending the procurement of vehicles.”
Inflation rose to a 10-year high of 59.39 percent year-on-year in February from 56.9 percent in January.
Economic reforms being pursued by treasury had started bearing fruit, with the government recording budget surpluses and increased revenues since November