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Wednesday, 31 October, 2001, 17:26 GMT
Zimbabwe's gloomy budget prediction
Dr Simba Makoni Zimbabwe finance minister
Makoni has not been able to control rising inflation
Thursday is budget day in Zimbabwe but commentators fear that the finance minister might put short term political gains ahead of prudent economic management. Our Harare reporter reports.

Olivia Nyabadza used to afford groceries, rent and medical bills. She also used to show up regularly at the hair salon for the latest style on the fashion scene. As she says, she was upwardly mobile.

Zimbabwean voters
Budget might target voters

But all that has changed in the last two years.

Now, whenever she goes to the supermarket, she takes a calculator and goes for only the most basic of supplies. She can barely make ends meet. Millions of others are in the same boat.

Economists say the government will most certainly come up with a budget that will do nothing to revive the economy

They say it would rather appease voters ahead of next year's crucial presidential election.

Vote-winning budget

Zimbabwe's economic growth, initially expected to decline by 2.8 percent, is now expected to shrink by around 10 percent by year's end.

Inflation is at an all-time high of 86.3% and is expected to hit the 100% mark in two months time.

Economists and political analysts say the annual budget might entrench the return to socialism declared by President Mugabe two weeks ago.

The abandoning of International Monetary Fund and World Bank economic policies which Mr Mugabe flirted with for 10 years, has already seen the re-introduction of price controls of basic commodities.

John Makumbe, a political analyst, predicts quite a number of handouts in the form of tax cuts will be announced in the budget.

Elections or not, consumers such as Nyabadza would like to see more funds channelled into social services, especially in health care where costs have gone beyond the reach of the majority.

But with next year's elections ringing in his ears, commentators say it seems likely Finance Minister Simba Makoni may find himself putting short term political gains before the prudent management of the ailing economy.

See also:

29 Oct 01 | Europe
EU sidelined by US
30 Oct 01 | Talking Point
Zimbabwe: Is it time for sanctions?
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