Senior WB executive predicts modest growth of Zim'...

Senior WB executive predicts modest growth of Zim's economy in 2023

Zimbabwean economy to maintain modest growth in 2023: World Bank-Xinhua — Stella Illieva

Zim Now Writer

The World Bank believes Zimbabwe’s economy will grow at a modest rate this year against a weakening global economic growth outlook.

The sentiments were expressed by World Bank Senior Economist for Zimbabwe, Stella Illieva, in her presentation at the Economic and Business Outlook Symposium which was organised by the Confederation of Zimbabwe Industries in Harare on Wednesday, February 8.

She said Zimbabwe’s economic growth is projected to be around 3.6 per cent in 2023, a slight increase from 3.4 per cent recorded in the previous year.

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 per cent this year, the weakest in three decades.

She attributed the significant slowdown of growth to rising geopolitical tensions and trade fragmentation elsewhere as well as climate change shocks.

Weakening economic activities in the global economy, she added, will have spillover effects on emerging markets and developing countries, which include 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.

“Growth in South Africa, the major trading partner of Zimbabwe, is expected to weaken further this year to 1.4 per cent before reaching 1.8 per cent in 2024,” she said.

The WB senior executive said the weak growth in global markets will have an adverse effect on the prices of metals and other commodities which Zimbabwe depends on, predicting:

“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.”

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

Her projections are slightly lower than the 3.8 per cent projections made by Finance and Economic Development Minister Mthuli Ncube last year during the presentation of the 2023 national budget last November.

Ncube said the growth would be driven by favourable international commodity prices, a good agricultural season, and tight monetary and fiscal policy, among other reasons.