Zimbabwe slashes 2022 growth forecast to four percent

APA-Harare (Zimbabwe)

The Zimbabwean government has revised downwards the country’s economic growth forecast for 2022, citing unfavourable global and domestic developments.

Presenting the 2023 national budget in parliament on Thursday, Finance Minister Mthuli Ncube said economy is now expected to grow by four percent, down from the 4.6 percent growth projection made during the mid-year budget review in June. 

The initial growth estimate for 2022 at the beginning of the year was 5.5 percent.

"Due to the base effect, global and domestic developments, particularly the impact of high inflation and resultant stabilisation measures on credit and demand, the economy is now projected to grow by four percent in 2022, a further downward revision from the mid-year projection of 4,6 percent,” Ncube said.

The headwinds seen affecting the growth projection include the negative impacts of the Russia-Ukraine war on the global economy and the government’s measures to curtail money supply as part of efforts to contain a thriving parallel market for foreign currency.

"In the outlook, the economy is now projected to grow by 3,8 percent in 2023 compared to the NDS1 (National Development Strategy 1) target of not less than five percent," the minister said.

The 2023 projected growth would be underpinned mainly by expansion in mining; construction and agricultural output, as well as growth in accommodation sectors, Ncube said.

The minister unveiled a ZW$4.5 trillion (about US$6.96 billion) budget for 2023 in which more than half of the allocations are expected to go towards salaries and operational costs.

Among other measures, he reinstated duty on imported basic commodities, which he had suspended last year as part of measures at the time to stabilise prices. 

The duty suspension is due to expire on November 30 and Ncube said he would not extend it, meaning that imports of basic goods such as sugar and cooking oil would now attract duty.

The minister also set aside ZW$76 billion for the 2023 general elections that are set for July next year.


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