IMF projects 2, 5% economic growth for Zim; analyst says too little to transform lives

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By Alois Vinga

THE International Monetary Fund (IMF) projects Zimbabwe’s economy will grow by 2, 5 % amid revelations of a global slowdown in economic growth.

The latest World Economic Outlook Growth Projections report projects an almost stagnant scenario in the coming two years for the Southern Africa nation.

“Zimbabwe’s economy is projected to grow at a rate of 2, 5% and 2, 6% between 2023 and 2024 respectively,” says the report.

The projections fall far below the figure of 3, 8% projected by Finance Minister, Mthuli Ncube in the 2023 National Budget blueprint.

In earlier projections, the World Bank had projected a 3, 6% growth rate for 2023.

“The baseline forecast is for growth to fall from 3,4% in 2022 to 2,8% in 2023, before settling at 3% in 2024. Advanced economies are expected to see an especially pronounced growth slowdown, from 2,7% in 2022 to 1,3% in 2023.

“In a plausible alternative scenario with further financial sector stress, global growth declines to about 2, 5% in 2023 with advanced economic growth falling below 1 %.

“Global headline inflation in the baseline is set to fall from 8,7% in 2022 to 7% in 2023 on the back of lower commodity prices but underlying (core) inflation is likely to decline more slowly,” the IMF report said.

Analysing the latest projections, Labour and Economic Development Research Institute of Zimbabwe (LEDRIZ) founding director, Doctor Godfrey Kanyenze said the outlook does not tell a positive story on the country’s economic struggles.

“It is very clear that the growth outlook is way below the figure of 5% projected in the National Development Strategy 1. It is even far lesser than the consistently required growth rate of 9% per annum since the inception of the economic reforms to attain the Upper Middle Income Economic status is to see the light of the day in 2030,” he said.

Quizzed on the possibility of Zimbabwe recovering from the deficit by capitalising on firming up of commodity prices, Kanyenze said there is need to undertake aggressive reforms.

“What this simply calls for is the implementation of radical economic reforms targeting institutions and parastatals as opposed to hinging hopes on external factors like commodity prices and good weather which we do not have any control over.

“We need policy driven growth as well as good quality growth which is hinged on the creation of rich jobs. Unfortunately, what we are witnessing in our economy is accelerated de-industrialisation and rapid informalisation of the economy which does so little in poverty alleviation,” he added.