The International Monetary Fund (IMF) has forecasted that the country’s economy would enter into a recession in 2019.
The IMF previously forecasted Zimbabwe’s economy to grow by as much as 4,2 per cent, but its latest report indicates that it will shrink by as much as 5,2 per cent.
An economic recession or slump is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
Labour and Economic Development Research Institute of Zimbabwe director Godfrey Kanyenze opined that the slump is attributable to two extreme weather phenomena, El Nino and Cyclone Idai. Said Kanyenze:
Well, the government has also indicated that they may also have to revise their (gross domestic product growth) as well. It is very simple and straight forward, it (IMF’s revision) is related to the El Nino-induced drought and the aftermath of Cyclone Idai.
Also, as you know there is the role of the primary factors that have had an adverse effect on the economy and the shortages of foreign currency. As you can see, a lot of companies are closing as a result of the acute shortages of foreign currency.
So, it is the El Nino-induced drought that has had a very adverse impact, the issue of Cyclone Idai which has worsened the situation and the absolute shortage of foreign currency.
These are just forecasts, predictions in terms of the weather, the foreign currency situation and reforms.
Professor Mthuli Ncube is the Minister of Finance and Economic Development.He was the Chief Economist and Vice President of the African Development Bank ,financial, economics, investment, and public policy expert, entrepreneur and academic. Professor Ncube divides his time between the private sector in Switzerland and... Read More About Mthuli Ncube