Zimbabwe’s GDP is poised to witness a significant expansion of 6% this year, surpassing the earlier projection of 3.8% growth, owing to improved electricity accessibility and a commendable agricultural performance, as stated by Finance Minister Mthuli Ncube last week.
Ncube emphasized, “The previous estimation of 3.8% growth is an underestimation. The growth should exceed that figure and approximate 6%.”
The government, in its cabinet statement, revealed that it anticipates a harvest of 2.3 million tonnes of maize this year, marking a substantial 58% surge compared to the previous season, courtesy of favorable rainfall conditions.
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“The primary focus of our recent efforts has been to acknowledge the robust recovery in the agricultural sector, particularly witnessing a 54% growth in the grains sub-sector. We are also observing a 35% growth in the non-food sector,” added the finance minister.
Minister Ncube further stated that the augmented output from the Kariba hydropower facility and the Hwange coal plant would contribute to an increased electricity supply.
Taking into account the forthcoming general election, Ncube downplayed the likelihood of excessive government expenditure and reiterated the objective of maintaining the entire budget deficit at 1.5% of the GDP, aligning with the November prediction.
In December, the International Monetary Fund (IMF) projected a deceleration in Zimbabwe’s real GDP growth to approximately 3.5% from the previous year’s 8.5%.
The IMF attributed this decline to various challenges, including soaring inflation, unpredictable rainfall patterns, and electricity shortages, which continue to impede Zimbabwe’s growth prospects. In October 2022, Ncube mentioned ongoing negotiations with the World Bank and IMF regarding the settlement of Zimbabwe’s debts to international financial institutions.
“The IMF mission acknowledges the authorities’ efforts in stabilizing the local foreign exchange market and curbing inflation,” highlighting the swift implementation of monetary policy tightening measures, increased flexibility in official exchange rates, and an austere approach to budgeting.
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Nevertheless, significant uncertainties persist, and the IMF underscored that the economic outlook hinges on the effective implementation of crucial policies and the evolution of external shocks.
Zimbabwe currently grapples with external debt exceeding $10 billion, a substantial portion of which remains in arrears. Over the past 15 years, the country has experienced periods of hyperinflation, which have resulted in a lack of financial assistance from institutions such as the IMF and World Bank for more than two decades.
