IMF cuts Zimbabwe’s growth projection to 5.1%

Image: Desmond Kwande/ AFP

The International Monetary Fund (IMF) says the Zimbabwe economy will grow 5.1% in 2021.

This presents a slower recovery compared to the 6% the same institution had predicted in June.

Inflation in Zimbabwe will average 92.5% this year and end the year at 41%, the IMF pointed out in its latest world economic outlook.

This is broadly in line with projections by the Reserve Bank of Zimbabwe, which downgraded its inflation forecast to between 35-53% for year-end, up from 25-35% previously.

Finance Minister Mthuli Ncube has set a growth target of 7.8%, banking on “rainfall season, higher international commodity prices, stable macroeconomic environment and a managed COVID-19 pandemic.”

Ncube believes the recovery would be carried by agriculture, which he says will expand by 34%, higher than the initially predicted 11%.

Ncube expects more growth of 5.4% next year, but the IMF sees only sluggish growth of 3.1% in 2022.

The World Bank has forecast the Zimbabwe economy to recover by 3.9% this year.

Meanwhile, the country’s  currency is performing badly against the green buck.

On the official market the Zimbabwean dollar is trading at around ZW$90 against the US$.

However, on the informal market it is trading at over ZW$180 per each American dollar.

Apparently, some business are pegging their prices based on the informal market rates much to the displeasure of the government which is threatening punitive measures.

Zwnews, NewZwire