UPDATE:Government may fail to pay workers this month

GOVERNMENT may not be able to keep paying state workers as their wages consumed 96.8 percent of government revenue in the first half of this year, Finance Minister Patrick Chinamasa said.

“The outlook suggests government may not be able to meet its payroll obligations,” he said as he presented a mid-term budget on Thursday. Government has been staggering civil service and armed forces pay days in an effort to meet its obligations.

Zimbabwe is experiencing its worst economic crisis since the hyper-inflationary period that peaked in 2008, when inflation soared to 500 billion percent, according to the International Monetary Fund.

Now, after it switched to use of the U.S. dollar in 2009, a shortage of currency, deflation and unemployment of about 90 percent have plunged the country back into crisis.

Zimbabwe owes foreign and domestic institutions about $9.6 billion and failed to make a $1.8 billion payment due to lenders in June. Chinamasa said he expects the economy to grow about 1.2 percent this year.

The minister also said the economy is expected to grow 1.2 percent in 2016, from the 1.4 percent forecast earlier in the year. He told parliament that the budget deficit had already overshot the target in the first half of the year at $623 million, and that the shortfall for the whole year could rise above $1 billion