Thu, 22 Jun 2017 10:52:37 +0000
By ANNIE ZULU
PARLIAMENT heard yesterday that the country’s Gross Domestic Product (GDP) growth in 2017 is projected to rise to 4.3 percent against an initial forecast of 3.4 percent.
Finance Minister Felix Mutati said this was due to increased agricultural output, improved power generation and higher mining output supported by better prices and power supply.
Mr Mutati added that other sectors that were supporting growth were construction, wholesale and trade and tourism.
The minister said this in a ministerial statement, adding: “Economic performance has rebounded, with inflation down to single digits, the exchange rate remaining largely stable while GDP growth has started recovering.
“Inflation that closed end of 2016 at 7.5 percent reduced further to 6.5 percent in May 2017. This was supported by the continued stability of the exchange rate, lower food prices in view of a good harvest and improved market confidence in the country’s policy direction. Inflation is projected to remain single digit in 2017,” he said.
And Mr Mutati has disclosed that Government has paid out a total of K4.3 billion towards clearance of the K17.35 billion stock domestic arrears.
He said Government had designed a time-specific dismantling strategy to address the arrears situation in a sustainable manner.
“The strategy also includes measures that will stop accumulation of new arrears,” Mr Mutati said.
The minister also indicated that Government was enhancing tax compliance efforts, coupled with getting additional resources through the tax amnesty to contribute to resolving the challenge of low revenue collections,’’ he said.
He noted however that revenues under-performed by 10 percent compared to the Budget estimates during the first five months of 2017.
He attributed the under-performance in revenues to low tax compliance by taxpayers, and delayed implementation of Budget measure such as land titling, installation of electronic fiscal devices to improve VAT collections, among others.
“We must all play our part by ensuring g that we meet our tax obligations. Failure to do so will attract punitive measures.
“Following the lower projected revenues, Government will also reduce and realign expenditures to meet its deficit target and fiscal consolidation objective. Government will also hasten the implementation of the 2017 Budget measures,” he said.
Meanwhile, Mr Mutati said Government has made tremendous social and economic progress on engaging the International Monetary Fund (IMF) on a possible programme.
He said Government and the fund had agreed on remaining actions needed to reach staffing levels agreement on a program that could be supported under the IMF’s Extended Credit Facility.
He assured that once the agreed required actions were implemented, the program could be presented to the board in August this year.
