World Bank projects lower Zim GDP growth
By Tawanda Musarurwa
Harare – The World Bank anticipates that Zimbabwe’s economic growth this year will grow by 0, 1 percent. This is significantly lower than the 4, 5 percent that was projected by Finance and Economic Development Minister Patrick Chinamasa in the 2018 National Budget Statement last month.
According to the World Bank’s January edition of its Global Economic Prospects report, Zimbabwe’s economy grew by 2, 8 percent last year. Government’s optimistic gross domestic product (GDP) growth projection was based on expected upturns in linchpin sectors namely agriculture and mining this year.
Economic analysts say the local economy still has to contend with mounting inflationary pressures mostly arising from the currency disparities which have created a thriving currency black market for hard currency.
“The need to disincentive the thriving black market for currency thus emerges as a key area of focus for the new government though the only sustainable option available to the authorities remains the promotion of export focused industries to grow foreign currency inflows along with luring the much needed foreign direct investments into the country,” said one analyst who preferred anonymity.
However, the World Bank remains cautious of perceived risk within the Sub Saharan African region, which could impact on specific economies.
“Downside risks continue to predominate, including the possibilities that commodity prices will remain weak, global financing conditions will tighten disorderly, and regional political uncertainty and security tensions will intensify,” reads part of the report.
The global financier is however ‘cautiously optimistic’: “On the upside, a stronger-than-expected pickup in global activity could further boost exports, investment, and growth in the region,” it said.
Meanwhile, the World Bank also said Sub-Saharan Africa’s GDP growth is projected to be 3, 2 percent this year, led by Nigeria growing 2, 5 percent, while Angola is expected to grow 1, 6 percent.
“Growth in the region is anticipated to pick up to 3, 2 percent in 2018 from 2, 4 percent in 2017. Stronger growth will depend on a firming of commodity prices and implementation of reforms.
“A drop in commodity prices, steeper-than-anticipated global interest rate increases, and inadequate efforts to ameliorate debt dynamics could set back economic growth. South Africa is forecast to tick up to 1, 1 percent growth in 2018 from 0, 8 percent in 2017. Nigeria is anticipated to accelerate to a 2, 5 percent expansion this year from 1 percent in the year just ended.”