Zimbabwe economy to grow by 6% this year: IMF

17 Nov 2021

Zimbabwe’s economy is forecast to grow by 6% in 2021, despite the uncertain outlook, according to the International Monetary Fund on Wednesday.

Dhaneshwar Ghura, IMF mission chief to Zimbabwe, said the Harare authorities’ “swift response to the COVID-19 pandemic, including through containment measures and support to vulnerable households and firms, helped mitigate its adverse impact.” 

Ghura added: “Economic activity is recovering in 2021, with real GDP expected to grow by about 6%, reflecting a bumper agricultural output, increased mining and energy production, buoyant construction and manufacturing activity, and increased infrastructure investment.”

However, he added that the coronavirus crisis and other factors had taken “a severe toll on the economic and humanitarian situation” in Zimbabwe over the past two years. 

“Zimbabwe’s economy contracted cumulatively by about 11% during 2019-20 owing to the combined effects of the pandemic, cyclone Idai, a protracted drought, and weakened policy buffers,” the IMF official stated.

Ghura went on to caution that uncertainty was still at a high, and the country’s economic outlook “will depend on the pandemic’s evolution—compounded by the economy’s vulnerabilities to climatic shocks—and implementation of sustainable policies.

“Decisive actions are needed to lock in economic stabilisation gains and accelerate reforms.”

Priorities should allow enhanced official exchange rate flexibility, combatting foreign exchange market distortions and introducing structural and governance reforms to bolster growth.

Zimbabwe has tackled severe distortions in the forex market “that has seen a thriving parallel market where hard currencies are traded at a premium of up to 100%.”