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Zimbabwe expects inflation to slow to 134% this year -finmin

Zimbabwe is grappling with its worst economic crisis in more than a decade.
Image: Supplied

Zimbabwe expects its average annual inflation to slow to 134% in 2020, according to a finance ministry document published on Friday, more than halving the central bank’s previous forecast.

The country is grappling with its worst economic crisis in more than a decade, with runaway inflation of 659.4% year-on-year in September, and severe shortages of foreign currency, food and medicine.

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The document, outlining Zimbabwe’s strategy for the 2021 budget which is set to be delivered at the end of November, said the slowdown in inflation would be thanks to a deepening of the foreign currency auction market, which is expected to aid exchange rate stability.

The central bank had previously forecast 2020 annual inflation at 300%.

Speaking at a finance ministry event on the budget strategy, finance minister Mthuli Ncube said inflation would fall into single digits as the government continues to keep its deficit below 3% of gross domestic product (GDP).

The document forecast a deficit of around 1.23% in 2021. It kept growth figures for this year and next year unchanged, at a contraction of 4.5% and growth of 7.4% respectively.

The country remains committed to nurturing credibility in its currency, the Zimbabwe dollar, whose value has plummeted since it was reintroduced last year, the document said.

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