HomeLocal NewsIMF projects 6% growth for Zim

IMF projects 6% growth for Zim

BY MTHANDAZO NYONI

THE International Monetary Fund (IMF) has predicted that Zimbabwe’s economy will grow by 6% this year, but warned that uncertainty remains high and the outlook will depend on the Covid-19 pandemic’s evolution, the pace of vaccination and implementation of sustainable policies.

The global lender said the growth would be spurred by a bumper agricultural output, increased energy production and the resumption of greater manufacturing and construction activities.

The 6% growth falls short of the 7,4% rise projected by the government and 3,9% forecasted by the World Bank recently.

According to a statement released by the global financial institution after a staff team led by Dhaneshwar Ghura conducted a virtual staff visit with the Zimbabwe authorities between  this month to discuss recent economic developments, the economic outlook shows that the southern African nation is in the right direction.

The meetings were held from June 1-15.

“Zimbabwe has shown resilience in the face of the Covid-19 pandemic and other exogenous shocks. The pandemic, on top of Cyclone Idai in 2019, a protracted drought and weak policy buffers, has taken a severe toll on the economic and humanitarian situation,” Ghura said.

“Despite the authorities’ timely actions to support the most vulnerable groups and businesses during the pandemic, real GDP contracted by 4% in 2020, after a 6% decline in 2019,” he said.

“However, an economic recovery is underway in 2021, with real GDP expected to grow by about 6%, reflecting a bumper agricultural output, increased energy production, and the resumption of greater manufacturing and construction activities,”

During the visit, the IMF mission noted Zimbabwe’s efforts to stabilise the local currency and lower inflation.

“Further efforts are needed to solidify the stabilisation trends and accelerate reforms. The near-term macroeconomic imperative is to improve the coordination among fiscal, foreign exchange and monetary policies, while addressing Covid-19 related economic and humanitarian challenges,” he said.

Ghura said Zimbabwe has been a fund member in good standing since it cleared its outstanding arrears to the IMF in late 2016.

He said the virtual IMF mission staff visit outcome will serve as a key input in the preparations for the 2021 Article IV consultation mission expected to take place later this year.

The IMF staff held meetings with Finance minister Mthuli Ncube, Reserve Bank of Zimbabwe governor John Mangudya, senior government officials and RBZ officials, representatives of the private sector and Zimbabwe’s development partners.

Recent Posts

Stories you will enjoy

Recommended reading