Harare Post Reporters

Minister of Finance, Economic Development, and Investment Promotion, Mthuli Ncube, has projected the country's domestic economy to grow to 5.5 percent by the end of the year.

This revised projection, up from the initial 5.3 percent, was announced during the presentation of the 2024 National Budget at the New Parliament Building in Mt. Hampden yesterday.

Minister Ncube attributed this positive growth trajectory primarily to better agricultural yields, stating, "Mr. Speaker, Sir, the domestic economy is now projected to grow to 5.5% in 2023, a slight upward revision from the August projection of 5.3%, on account of better-than-expected output in agriculture, in particular, tobacco, wheat, and cotton."

However, the Minister also cautioned about a potential slowdown in economic growth to 3.5% in 2024. This is mainly due to the anticipated impact of the El Nino phenomenon forecasted for the 2023/24 summer cropping season on agricultural output, as well as declining mineral commodity prices attributable to the global economic slowdown.

On the trade front, Minister Ncube reported that merchandise exports stood at US$5.2 billion during the first nine months of the year.

These exports are projected to increase by 4.3% to US$7.3 billion by year-end, up from US$7 billion in 2022.

This increase is expected to be driven by higher exports of tobacco, lithium, and diamonds.

Domestic price stability has been another highlight from Minister Ncube's budget presentation.

"Since the third quarter of the year, domestic prices have been relatively stable, as reflected by month-on-month inflation, which declined from 12.1% in June 2023 to 4.5% in November 2023," explained Minister Ncube.

Concurrently, the Minister said that annual headline inflation declined from 30.9% in June 2023 to 21.6% in November 2023.

In the outlook, the Minister added that annual inflation is expected to remain relatively stable and is projected to end the year 2023 slightly below 20%.

Minister Ncube further claimed that the introduction of the wholesale foreign exchange auction, following the liberalisation of the exchange rate, led to a significant decline in the parallel market premium.

"From a peak of over 140% in May 2023, it has reduced to around 20% in October 2023," said Minister Ncube.

Meanwhile, the budget presentation was well-received by legislators and economic experts, being described as pro-poor and a testament to the Government's commitment to improving the economy and uplifting the lives of the people.