The Sunday News
Business Editor
ZIMBABWE’s Gross Domestic product is expected to grow by six percent this year anchored by bumper agricultural output, increased energy production, and the resumption of greater manufacturing and construction activities, the International Monetary Fund has said.
In a statement after the international financial body conducted a virtual staff visit with Government authorities from 1-15 June 1–15 to discuss recent economic developments and the economic outlook, IMF said Zimbabwe has continued to show silence despite 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 6 percent decline in 2019. 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 said.
IMF also hailed the foreign exchange auction system introduced by RBZ.
“The IMF mission notes the authorities’ efforts to stabilize the local currency and lower inflation. In this regard, contained budget deficits and reserve money growth, as well as the introduction of a foreign exchange auction system, are policy measures in the right direction.”
It however, said 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.”
It said authorities’ strategy and policies as embodied in the National Development Strategy need to be fully operationalized and implemented.
“Zimbabwe has been a Fund member in good standing since it cleared its outstanding arrears to the IMF in late 2016. The Fund provides extensive technical assistance in the areas of economic governance and financial sector reforms, as well as macroeconomic statistics.”
The virtual IMF mission staff visit outcome will serve as a key input in the preparations for the 2021 Article IV consultation mission expected to take place later this year.
The IMF staff that was led by Mr Dhaneshwar Ghura, held meetings with Finance and Economic Development Minister Professor Mthuli Ncube, Reserve Bank of Zimbabwe Governor John Mangudya, other senior government and RBZ officials, representatives of the private sector and Zimbabwe’s development partners.
