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World Bank Revises Zimbabwe’s Economic Growth Projection Down To 3.7%

The World Bank (WB) has projected that Zimbabwe’s economy will this year grow by 3.7 per cent reducing the growth projections from the initially 4.3 per cent. 

Revised projections are, however, still below the Ministry of Finance’s forecast of 5.5 per cent which is subject to review in the mid-term budget next month. Said the Bretton Woods institution:

The economy is projected to continue to recover in the medium term, amid downside risks. GDP is projected to grow by 3.7% in 2022 but slow down in the medium term as the positive base effects diminish. The downward revision is based on worsening agriculture conditions (output set to contract by 1.5% in 2022 from double digit-growth in 2021 based on falling rain levels and rising prices of key inputs) and global price increases amidst supply-side disruptions. Mining production and exports are expected to benefit from continuing high international prices while tourism, trade, and transport are likely to start recovering with positive spillover effects on other sectors. The risks to the outlook are significant with heightened global risks as global growth slows down and uncertainty about the pandemic remains. Domestic risks also weigh on growth performance and are linked to climatic shocks, and expansionary fiscal and monetary policy thereby delaying economic recovery.          

WB also projected that poverty levels will further decline in 2022, albeit marginally as conditions for a good harvest deteriorate, prices remain high, and the capacity of the social system to target and reach the poor with adequate social safety nets is constrained.

The World Bank says if inflation is not adequately managed, the purchasing power of incomes will be eroded, putting more people in or at risk of poverty and delaying improvements in basic service delivery.

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