Zimbabwe’s average annual inflation rate will drop to 134% in 2020, according to a new report published by the Ministry of Finance.
The Southern African country has been grappling with dire economic declines for more than ten years, with runaway inflation hitting the 659.4% mark in September. As a result, there have been severe shortages of foreign currency and basic products like food and medicine.
While outlining Zimbabwe’s strategy for the 2021 financial year budget, to be delivered in Parliament at the end of November, the Ministry of Finance said that the drop in inflation levels would be as a result of deepening of foreign currency auction market, which is set to aid exchange rate stability.
The finance ministry’s forecast is lesser than that of the central bank, which had predicted 2020 annual inflation at 300%.
Mthuli Ncube, the finance minister, said that inflation would fall into single digits as the government maintains the deficit below 3% of gross domestic product (GDP).
The finance ministry projects a deficit of about 1.23% in 2021, and growth figures for this year at -4.5% and for next year at 7.4%.
Ncube also added that they will continue nurturing credibility in the country’s currency, the Zimbabwean dollar, whose value has plummeted since it was reintroduced last year.