The International Monetary Fund (IMF) has projected Zimbabwe’s economy to rebound next year and grow 4,2 percent from a decline of 10,2 percent forecast for 2020, as the global economy recovers from the impact of the Covid-19 global pandemic.
As the domestic and global economy recover, the IMF said Zimbabwe’s annualised consumer inflation, which it put at 255 percent for 2019, will close at 622 percent this year, but fall drastically to 3,7 percent in 2021.
Zimbabwe Treasury said last week it had ticked all the boxes of targeted reforms under the TSP (2018-2020), laying a solid foundation for sustained growth of at least 5 percent annually until 2030.
The Government’s Vision 2030, which encapsulates the ongoing economic programmes, is targeted at growing Zimbabwe into an upper middle-income economy with per capita income averaging US$4 000.
And the Treasury expects the economy to expand 7,4 percent next year from a projected 4,5 percent Covid-19-induced decline this year on the back of expected good agricultural season and recovery of the global economy.
Key drivers of next year’s growth will include an improvement in exports and commodity prices, as the world economy kicks into gear again, along with a recovery in both private consumption and investment.
The projections by the global lender, while agreeing generally on decline and growth, however, contrast sharply with Finance Minister and Economic Development Professor Mthuli Ncube’s forecasts in terms of rates of contraction and expansion for the successive years.
Presenting the pre-budget strategy paper ahead of the 2021 national budget presentation next month, Minister Ncube said the domestic economy would shrink, on account of the impact of Covid-19, but register solid growth next year.
The IMF made its projects in its forecasts for Sub-Saharan Africa released this week titled “Difficult Road to Recovery”, which places Zimbabwe among economies to register the fastest growth rates next year.
According to the IMF, Sub-Saharan Africa is contending with an unprecedented health and economic crisis — one that, in just a few months, has jeopardised years of hard-won development gains and upended the lives and livelihoods of millions.
While the onset of the pandemic was delayed in sub-Saharan Africa, and infection rates have been relatively low compared with other parts of the world, most countries took precautionary measures, like the rest of the world, and shut down the majority of economic activities except essential services, dealing heavy blows to the economies.
“Overall, the region is projected to contract by minus 3 percent in 2020. The largest impact of the crisis on growth has been for tourism-dependent economies, while commodity-exporting countries have also been hit hard. Growth in more diversified economies will slow significantly, but in many cases will still be positive in 2020,” IMF said.
So far this year, global trade has declined by 3,5 percent in the first half of 2020, global travel and tourism have come to a halt, and oil prices have settled at $41,5 per barrel, representing about 32 percent decline from 2019.
Notably as well, the resurgence of new cases in many advanced economies and the spectre of repeated outbreaks across the region suggest that the pandemic will likely remain a very real concern for some time to come.
Nonetheless, amid high economic and social costs, countries are now cautiously starting to reopen their economies and are looking for policies to restart growth.
As the world readies to open, an US travel agency says Zimbabwe is world’s safest destination.
A former US Department of Defence and North Atlantic Treaty Organisation (Nato) security expert with years of experience on risk assessment worked with the travel agency, Tourlane,
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