Curb inflation and money supply

Source: Curb inflation and money supply | The Herald November 12, 2019

Curb inflation and money supplyDr Gift Mugano

Zvamaida Murwira Senior Reporter
Finance and Economic Development Minister Professor Mthuli Ncube should come up with fiscal policies that curb inflation and stimulate production when he presents his 2020 National Budget proposals on Thursday, economic analysts have said.
They urged Treasury to come up with realistic projections so that the Budget is not premised on wrong assumptions as that could impede the desire to meet targets.

Economist Dr Gift Mugano said in a Capitalk FM radio programme yesterday that there was need to come up with realistic projections so that the country was not found wanting in meeting economic targets.

However, he said, some of the impediments to meeting targets were natural causes like drought and cyclones.
“The performance has not been good, but of course there are other factors like drought and Cyclone (Idai) which affected from a planning point of view.

“There is also an issue of growth of money supply which ought to be dealt with,” he said.
He said Government should direct more resources towards power generation as part of deliberate efforts to revive industry.
Another economic analyst Mr Langton Mabanga said there was need to direct resources towards agriculture.
He bemoaned the late planting by farmers which he said was the result of high input cost.

“Farmers are not going back to the field, there is limited planting that is going on, you go to mining . . . We knew we would miss the target.

“We are losing on the Transitional Stabilisation Programme and curbing inflation. We need to manage and really focus on appropriate energy where it matters. Let us do what is practical to Zimbabwe. Let us optimise our land and our minerals,” said Mr Mabanga.

Economic analyst Mr Brains Muchemwa said there was need to guard against broad money supply.
“The most important intervention should be around safeguarding fiscal solvency in order to reduce the destabilisation effects of excessive broad money supply,” said Mr Muchemwa.

Prof Ncube is on Thursday expected to present a Budget that speaks to economic growth through increased production as the country moves out of austerity.