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@Wamagaisa 1/1Budget surplus should be achieved in periods of economic growth, not in periods of negative growth as in Zim's case. Cutting government expenditure reduces rate of growth, it means the economy is performing below it's potential.
2 Mthuli's targeting a budget surplus, and the austerity and fiscal tightening mean that the economy runs below full potential and leads to higher unemployment than otherwise. Also industry closures due to lack of demand.
3 Higher taxes,lower spending cuts, squeezes household disposable income&moreover in Zim the incomes have been eroded by inflation.Aggregate demand has fallen, industry had to scale back or close.A budget surplus takes money from elsewhere in the economy. It doesnt create money
4If the gvt is committed to running a budget surplus,it is likely the government will need to cut back on public sector investment. – Investing in railways,roads, education etc.If the gvt cut back on investment,it could harm the long-term productive capacity of the economy.
5. The purpose of running a budget surplus is to prevent excessive economic growth and prevent inflation.Not what the minister is doing,we don't have excessive economic growth, we are growing negatively and our inflation is not a function of too much money chasing too few goods.
6. Infact what Mthuli is doing is contradicting the reality that they don't have money, running a surplus but you dont have money and you haven't provided for your basic necessities. Only one who has money and who has met all their needs is the one to have surplus.
7. If indeed he was achieving surplus he should cut or reduce taxes so as to spur economic growth, lower taxes are an incentive for business and economic growth.
8. If IMF through their Staff Monitored Program need a commitment to spending control, Mthuli cld have done that by focusing on a balanced budget nt a budget surplus.The budget surplus is the minister's own crazy planning&thinking.State of economy does not permit budget surplus
