Zim economy set for moderate growth in 2023, says ...

Zim economy set for moderate growth in 2023, says WB

Zim Now Writer

The World Bank has said Zimbabwe’s economy is projected to grow at a modest rate in 2023 against a weakening global economic growth outlook.

World Bank Senior Economist for Zimbabwe, Stella Illieva, told the Confederation of Zimbabwe Industries-organised Economic and Business Outlook Symposium in Harare on yesterday that the country’s economic growth is projected to be around 3.6 percent in 2023, a slight increase from 3.4 percent recorded in 2022.

While commenting on global growth projections, Illieva said growth in the sub-Saharan Africa region is more promising than the global outlook, as global growth is expected to decelerate to 1.7 percent this year, its weakest in three decades.

Illieva also said rising geopolitical tensions and trade fragmentation elsewhere in the world as well as climate change shocks will lead to a significant slowdown of growth.

Emerging markets and developing countries such as Zimbabwe will experience spill-over effects of weakening economic activities in the global economy, according to the WB Senior Economist for Zimbabwe.

“Aggressive monetary policy tightening to contain high inflation, deteriorating financial conditions, and continued disruptions from the war in Ukraine are the drivers of this worsening economic performance on a global scale,” Illieva said.

Illieva added that growth in South Africa, Zimbabwe’s major trading partner, is expected to weaken further this year to 1.4 percent before reaching 1.8 percent in 2024.

The weak growth in global markets, Illieva said, will have an adverse effect on the prices of metals and other commodities which Zimbabwe depends on.

“Prices of gold, tobacco, and platinum have been in decline since 2022; this trend is expected to continue this year, at least for gold and tobacco,” said Illieva.

She also said that unfavourable terms of trade mean higher import bill and cost of living, fewer exports, and pressure on the domestic currency and labour market.

While presenting the 2023 National Budget in November last year, Finance and Economic Development Minister Mthuli Ncube projected that the country’s economy would grow by 3.8 percent this year, driven by favourable international commodity prices, a good agricultural season, and tight monetary and fiscal policy, among other factors.