World Bank confirms strong economic growth in Zim

The herald

Business journalist

The World Bank says Zimbabwe’s economy grew 5.1% in 2021, a significantly higher estimate than the bank’s previous projection of 3.9%, a position that affirms the country’s strong growth potential. economy despite the Covid-19 pandemic.

Zimbabwe’s resilient economy is firmly on the road to recovery, mainly driven by higher agricultural production after good rains last year, better capacity utilization in industry, massive public infrastructure projects across the country and stabilization of prices and exchange rates following a cocktail of effective policy interventions.

The Bretton Woods institution’s growth estimate for Zimbabwe, however, is more than a few percentage points lower than the government’s more optimistic forecast, which projected a 7.8% expansion in 2021.

Nonetheless, raising the estimate to 5.1 percent represents a huge seal of approval for the growth potential of Zimbabwe’s economy going forward, especially from a conservative institution such as the Bank. global.

Notably though, it comes after another Bretton Woods institution, the International Monetary Fund, forecast late last year that Zimbabwe’s economy would grow by 6% in 2021.

According to the World Bank’s latest Global Economic Prospects report, Zimbabwe’s gross domestic product growth rate will remain positive at 4.3% in 2022 before reaching 4.2% in 2023.

Finance and Economic Development Minister Mthuli Ncube has publicly stated that Zimbabwe’s economy is on track towards President Mnangagwa’s vision of a well-entrenched, self-sustaining upper middle-income society by 2030. on strong growth in the mining sector.

Vision 2030, fundamentally, seeks to transform Zimbabwe into an upper middle income economy, with a gross national income per capita of over $ 5,000 in real terms.

According to Minister Ncube, the journey towards Vision 2030 began with the implementation of the Transitional Stabilization Program (TSP), which was launched in October 2018.

To this end, a number of notable achievements have been recorded, including the restoration of external and internal macroeconomic stability and the national currency.

Informed by strong economic fundamentals in the middle of last year, Minister Ncube revised up the economic growth rate when he presented his mid-term budget review to 7.8% from his projection of initial growth of 7.4% for 2021.

According to the World Bank Zimbabwe Economic Update (ZEU) report launched last year, it is expected to strengthen further in 2022 as vaccine rollout intensifies and Strategy implementation. national development plan 1 (2021-2025) is bearing fruit.

The ZEU report released by the World Bank last year presented a perspective on macroeconomic and poverty developments and discussed ways to strengthen public service delivery in key sectors.

Mukami Kariuki, who headed the World Bank in Zimbabwe, said the economy could recover faster depending on the performance of the pandemic and regional economies.

She said Zimbabwe’s economy is expected to grow faster than its neighbors and, by comparison, the average growth rate for sub-Saharan Africa in 2021 is at a much lower rate of 2.8%.

Last year, the bank praised the government for its ability to tackle the perennial national budget deficits of the past and to control reserve currency growth, as a way to contain inflationary pressures.

The envisioned GDP growth, the bank noted, was attributable to exceptional agricultural production in 2021, increased mining and electricity production, vibrant construction and manufacturing activity, and increased investment in infrastructure. .

According to the global financier, the “rapid response of the country to the Covid-19 pandemic, in particular through containment measures and support for vulnerable households and businesses, made it possible to fully mitigate the negative impact of the pandemic .

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