- Finance Minister Mthuli Ncube has stated that Zimbabwe’s GDP growth prediction of 3.8% is an underestimate, and growth should be closer to 6%, citing improved agricultural performance and increased electricity availability.
- The government expects to harvest 2.3 million tonnes of maize this year, a 58% increase from the previous season, due to favorable rainfall.
- Despite the general election this year, the government aims to minimize excessive expenditure and maintain the entire budget deficit at 1.5% of GDP, the same as predicted in November.
Due to improved electricity availability and excellent agricultural performance, Zimbabwe’s GDP might expand by 6% this year, above the prior prediction of 3.8% growth, according to Finance Minister Mthuli Ncube on Friday.
“We are saying 3.8% growth is an underestimate. The growth should be higher than that and close to 6%,” according to Ncube, the increase should be greater than that and near to 6%.
This Monday, the government said in a cabinet statement that it anticipated harvesting 2.3 million tonnes of maize this year, a 58% increase from the previous season due to favorable rainfall.
“What we mainly did this week was to recognise the strong recovery in the agricultural sector where we have seen 54% growth, at least in the grains sub-sector. We are seeing a 35% growth in the non-food sector,” the finance minister added.
According to the minister, increased output at the Kariba hydropower facility and the Hwange coal plant should contribute to increased electricity supply.
Given this year’s general election, he minimized the possibility of excessive government expenditure and stated that the goal remained for the entire budget deficit to be 1.5% of GDP, the same as predicted in November.
Back in December, the International Monetary Fund noted that Zimbabwe’s real GDP growth is expected to slow to about 3.5% from 8.5% a year prior.
The bank cited multiple shocks such as a surge in inflation, erratic rainfall and electricity shortages as factors that may continue to weigh on Zimbabwe’s growth prospects. According to Ncube back in October, 2022, Zimbabwe was negotiating how to pay off its debts to international financial institutions with the World Bank and IMF.
“The IMF mission notes the authorities’ efforts to stabilize the local foreign exchange market and lower inflation,” it pointed to the quick tightening of monetary policy, more flexibility in official exchange rates, and a conservative budgetary approach.
However, there is still a lot of uncertainty, and the IMF stated that the economic outlook would rely on how important policies are implemented and how external shocks develop.
Zimbabwe has more than $10 billion in external debt, the most of which is in arrears, and has experienced periods of hyperinflation during the previous 15 years. As a result, it hasn’t gotten assistance from financial institutions like the IMF and World Bank in more than 20 years.