HARARE – Zimbabwe’s economy will grow by 3.5% this year, well below the 6.3% forecast for 2021 according to African Development Bank (AfDB), as the country struggle to avoid setbacks due to foreign currency shortages.
Gross domestic product (GDP) growth has also been held back by exchange rate turbulence combined with unrelenting inflationary pressure.
However, the AfDB said that despite the slowdown, a number of economic fundamentals would remain positive to support moderate growth.
The AfDB had previously said the 6.3% growth would be driven by a favorable 2021/2022 agricultural season and firming international commodity prices.
Commodity prices remained resilient, but Zimbabwe, like the rest of the world, slipped under renewed pressures from global instability, triggered by soaring energy and food prices fueled by instabilities in Eastern Europe.
“Growth is expected to average 3.5% in 2022,” the AfDB said in its new African Economic Outlook 2022, released last week, as it forecast a further slowdown next year.
“In the same period, inflation could fall to 85% (compared to 131% for the currency) and 43% (in 2023) due to the stability of food prices and the stability of the exchange rate.
“The budget deficit should be reduced to 0.2% of GDP with the maintenance of budgetary discipline.
“The current account balance will remain positive, mainly due to lower food imports, improved domestic production and increased export earnings on the back of improved commodity prices.”
- Editor/ additional report by The Standard
