APA-Harare (Zimbabwe) The International Monetary Fund (IMF) projects Zimbabwe’s economy to grow by about 4.8 percent in 2023 but warns that the economic outlook for the southern African country will depend on commitment by the Harare authorities to structural reforms.
In a statement at the end of a week-long visit to Harare that ended on Wednesday, mission head Wojciech Maliszewski expressed satisfaction with Zimbabwe’s efforts to ensure post-COVID recovery as shown by its improving real Gross Domestic Product (GDP).
“Real GDP is projected to grow by around 4.8 percent in 2023, supported by strong activity in the mining sector and – reflecting the beneficial impact of structural reforms – in agriculture and energy sectors,” Maliszewski said.
He, however, said the growth was expected to slow to 3.5 percent in 2024 “due to weaker global demand for minerals and a weather-related slowdown in agriculture.”
“As external conditions worsen, the economic outlook will even more crucially depend on progress toward macroeconomic stabilization and transformational structural reforms.”
The Fund had earlier forecast the economy to expand by 4.1 percent in 2023.
He noted that local-currency (ZWL) inflation and exchange rate pressures have abated in recent months following significant price increases and exchange rate depreciation in the second quarter of 2023.
“Nevertheless, the parallel FX market premium is large at above 30 percent, and ZWL inflation remains high. The fiscal deficit, excluding QFOs, is projected at 2.3 percent of GDP in 2023,” Maliszewski said.
The mission called on the Zimbabwean authorities to comprehensively address the central bank’s quasi-fiscal operations to mitigate liquidity pressures and re-anchor inflation expectations.
JN/APA