The International Monetary Fund (IMF) which projected Zimbabwe’s 2017 real gross domestic product projections at 2 percent has since revised upwards the projection to 2.8 percent, showing bullish sentiments in the economy’s potential this year.
Growth has been mainly anchored by dynamic growth in the agricultural and mining sectors, the Fund said in its October 2017 World Economic Outlook, titled Seeking Sustainable Growth – Short-Term Recovery, Long Term Challenges.
In terms of global growth, the world is now is forecasted to grow at 3.6 percent in 2017 and 3.7 percent in 2018, which is 0.1 percent point higher in both years than in the April and July forecasts. According to theIMF, notable pickups in investment, trade, and industrial production, coupled with strengthening business and consumer confidence, are supporting global recovery.
However, Zimbabwe’s medium term growth is expected to recede, and is projected to decline to 0.8 percent next year and -0.9 percent come 2022. The Fund is also forecasting average consumer prices to be 2.5 percent this year, rising to 9.5 percent next year. However, inflation is expected to rise and close the year at 7 percent this year, and 9.5 percent next year.
According to the Fund, headline inflation rates are projected to increase in both advanced and emerging market and developing economies, though somewhat less briskly than anticipated in the April 2017 WEO, partly reflecting weaker-than-expected oil prices. Zimbabwe’s balance of account as a percentage of GDP will this year close the year at -3.6 percent, -0.8 percent in 2018 and -1.9 percent in 2022, according to the Fund’s estimates.
“The global cyclical upswing that began midway through 2016 continues to gather strength. Only a year and a half ago, the world economy faced stalling growth and financial market turbulence. The picture now is very different, with accelerating growth in Europe, Japan, China, and the United States.
“Financial conditions remain buoyant across the world, and financial markets seem to be expecting little turbulence going forward, even as the Federal Reserve continues its monetary normalization process and the European Central Bank inches up to its own. These positive developments give good cause for greater confidence, but neither policymakers nor markets should be lulled into complacency”, the IMF said. – Wires