Zim expecting strong economic rebound in 2021 – Finance Minister
Harare, (New Ziana) – Zimbabwe expects its economy to grow by 7.4 percent in 2021, recovering from the impact of the Covid-19 pandemic that hit major economic sectors this year, Finance and Economic Development Minister, Mthuli Ncube said on Friday.
Presenting the 2021 Budget Strategy Paper, Professor Ncube said the recovery, from an anticipated contraction of 4.5 percent this year, would be driven by improved consumption and investments.
“The recovery in consumption is mainly anchored on expected stabilisation of inflation through ongoing policy interventions which should aid restoration of purchasing power of consumers,” he said.
“Employers including government will continue to review wages and salaries in line with inflation developments and budget capacity to restore eroded incomes as the economy recovers.”
The country’s Gross Domestic Product is expected to grow by 5.5 percent in 2022 and 5.2 percent in 2023.
On the other hand, inflation is expected to drop to as low as 143 percent by year-end, Ncube said.
The Reserve Bank of Zimbabwe had earlier forecast inflation to close the year at 300 percent.
“The slowdown in inflation will be attributed to deepening of the foreign currency auction market which is expected to sustain exchange rate stability,” he said.
“Reserve Bank is also expected to continue to curtail growth in money supply which is one of the major drivers of inflation.”
At the end of September, inflation stood at 659.40 having dropped 101 percentage points from the previous month.
Inflation peaked at 785 percent in May but has gradually slowed down since the government introduced the foreign currency auction system at the end of June.