HARARE: Zimbabwe’s economy is projected to grow at a modest growth rate in 2023 against a weakening global economic growth outlook, according to the World Bank.
Speaking at the Economic and Business Outlook Symposium, organized by the Confederation of Zimbabwe Industries in the Zimbabwean capital of Harare on Wednesday, World Bank Senior Economist for Zimbabwe Stella Illieva said Zimbabwe’s economic growth is projected to be around 3.6 percent in 2023, a slight increase from 3.4 percent recorded in 2022.
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, the weakest in three decades.
Rising geopolitical tensions and trade fragmentation elsewhere as well as climate change shocks will result in a significant slowdown of growth, she said.
Weakening economic activities in the global economy will have spillover effects to emerging markets and developing countries, which includes Zimbabwe, she said.
“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,” she said.
Growth in South Africa, the major trading partner of Zimbabwe, is expected to weaken further this year to 1.4 percent before reaching 1.8 percent in 2024, she said.
In addition, Illieva said the weak growth in global markets 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.
Unfavourable terms of trade means higher import bill and cost of living, fewer exports, and pressure on the domestic currency and labor market, she added.
Presenting the 2023 national budget last November, Zimbabwean Finance and Economic Development Minister Mthuli Ncube projected the country’s economy to 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 reasons.