The latest International Monetary Fund (IMF) World Economic Outlook has projected that Zimbabwe’s 2019 growth rate will be negative at -5.5 per cent.
Such estimations of a shrinking growth rate projections have gone against Finance Minister Mthuli Ncube’s earlier prediction that Zimbabwe’s economy shall grow by 3,1 per cent lower than the 2018 estimated growth rate of 4 per cent.
Zimbabwe’s shrunk growth rate reflects the impact of unfavourable weather on agriculture and macro-fiscal vulnerabilities from previous unsustainable fiscal and current account deficits according to Prof Ncube in his budget statement.
The World Bank had earlier on projected that Zimbabwe’s Gross Domestic Product (GDP) would grow by 3,7 per cent in 2019.
The current price increases will negatively impact Zimbabwe’s economic growth according to the WB.
Zimbabwe has been witnessing prices going up recently with the country’s RTGS currency loosing value to the US Dollar.
“The increases in prices that we have witnessed since October last year will affect the growth rate for 2019,” WB Zimbabwe Country Chief Economist Marko Kwaramba is quoted in local press.
“For 2018, in the first quarter the growth was real, but it was then disturbed by the last quarter.”
The IMF also projects a decline in global growth to 3.3 per cent in 2019 from 3.6.
“One year ago economic activity was accelerating in almost all regions of the world and the global economy was projected to grow at 3.9 percent in 2018 and 2019,” the IMF report says.
“One year later, much has changed: the escalation of US–China trade tensions, macroeconomic stress in Argentina and Turkey, disruptions to the auto sector in Germany, tighter credit policies in China, and financial tightening alongside the normalization of monetary policy in the larger advanced economies have all contributed to a significantly weakened global expansion, especially in the second half of 2018.”
“With this weakness expected to persist into the first half of 2019, the World Economic Outlook (WEO) projects a decline in growth in 2019 for 70 percent of the global economy.”