IMF upgrades Zim growth forecast

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Harare, (New Ziana) – The International Monetary Fund (IMF) on Thursday upgraded Zimbabwe’s 2021 economic growth forecast to six percent from an earlier projection of 3.1 percent.

The revision follows a recent “virtual visit” by an IMF team led by Dhaneshwar Ghura from June 1 to 15 that was aimed at discussing recent economic developments and the economic outlook.

The growth is on the back of higher output in agriculture, energy, manufacturing and mining, the Bretton Woods institution said, warning however that uncertainty remained high due to the Covid-19 pandemic.

Ghura lauded government efforts to stabilise the economy, saying Zimbabwe had resultantly shown “resilience in the face of the COVID-19 pandemic and other exogenous shocks.

“The pandemic, on top of cyclone Idai in 2019, a protracted drought, and weak policy buffers, has taken a severe toll on the economic and humanitarian situation. Despite the authorities’ timely actions to
support the most vulnerable groups and businesses during the pandemic, real GDP contracted by four percent in 2020, after a six percent decline in 2019,” he said.

“However, an economic recovery is underway in 2021, with real GDP expected to grow by about six percent, reflecting a bumper agricultural output, increased energy production, and the resumption
of greater manufacturing and construction activities.”

The IMF lauded efforts to stabilize the local currency and lower inflation through containing budget deficits and reserve money growth as well as the introduction of a foreign exchange auction system last
year.

“Further efforts are needed to solidify the stabilization trends and accelerate reforms. The near-term macroeconomic imperative is to improve the coordination among fiscal, foreign exchange and monetary
policies, while addressing COVID-19 related economic and humanitarian challenges,” Ghura said.

Zimbabwe remains unable to access IMF financial support and is only getting technical assistance owing to political issues and arrears owed to other multi-lateral institutions.
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