The International Monetary Fund (IMF) says it expects Zimbabwe’s economy to grow by 2,4 percent with further growth projected after the country’s elections to be held in July or August this year.
IMF’s projections fall below the Zimbabwe Government’s target of 4,5 percent which was revised upwards from 3,7 percent on the back of an anticipated increase in foreign direct investment and the opening up of the economy to global capital through President Emmerson Mnanangwa’s Zimbabwe is Open for Business campaign.
In its World Economic Outlook (2018) report issued last week, the IMF said real Gross Domestic Product rate will be pegged at 2,4 percent while projected consumer prices (inflation) will be 5, 2 percent.
The report dubbed "World Economic Outlook, April 2018 Cyclical Upswing, Structural Change" was issued during the IMF and World Bank Spring meetings in Washington last week.
Speaking at a press conference following presentation of the report last week, Deputy Chief of the World Economic Studies Division, research department, Malhar Nabar, said Zimbabwe’s economic growth would pick up next year.
“Zimbabwe has been through a difficult period and is obviously undergoing a political transition right now. For this year, we see growth slightly below the sub-Saharan Africa average, but it is projected to pick up next year.”
In a briefing following the release of the report, IMF African Department director, Mr Abebe Aemro Selassie, said the Bretton Woods institution would consider lending to Zimbabwe after the elections.
“So, I think what's important for Zimbabwe to get an arrangement with the IMF, you know, for having a way of being able to clear these arrears with multilateral development banks is one step. And also, we need to understand the debt picture and find a way to make sure that the rest of the debt can be sustainable. So, on the financing side, that is one element.
“Then, on the other side, really is trying to agree on a programme that will be able to engender growth, address a lot of the development challenges that Zimbabwe has. And importantly, try and reverse the increase in formality that we've seen in the economy, trying to reverse that and get growth going. So, agreeing on those elements will be important in the post-election environment and we're hopeful that we can move forward quickly.”
Selassie said the rest of sub-Saharan Africa would record an average of 2,8 percent growth.
“So sub-Saharan Africa is seeing a modest pickup in economic growth. In particular, growth this year is projected to pick up modestly from 2.8 percent in 2017 to 3.4 percent this year. This recovery is fairly broad-based with two thirds of the countries in the region seeing growth accelerating in 2018.”
In January this year, IMF managing director Christine Lagarde met President Mnangagwa on the sidelines of the World Economic Forum in Davos, Switzerland.
Lagarde welcomed President Mnangagwa’s commitment to stabilising the Zimbabwean economy and working towards normalising the country’s engagement with the international community.
She reiterated the IMF’s commitment to continue to support Zimbabwe as it addresses its economic challenges.
Zimbabwe cleared its arrears with the IMF in October 2016, after paying US$108 million. The Southern African country had been in arrears with the IMF since 2001.