World Bank predicts gloomy outlook for Zim

HARARE - The World Bank has predicted a gloomy economic outlook for Zimbabwe, showing the depth of a recession fuelled by a liquidity crunch and a sputtering agriculture-dependent economy dented by a devastating drought.

The World Bank said the economy is again forecast to perform abysmally in 2016, with a 1,5 percent GDP growth projected against Finance minister Patrick Chinamasa’s 2,7 percent growth target.

Zimbabwe, which is facing its worst political crisis in years following the violent and deadly factional fights in the ruling Zanu PF, has failed to register significant economic growth since the controversial 2013 elections that saw President Robert Mugabe extending his iron grip on the country amid accusations of ballot fraud.

In an economic update focusing on changing growth patterns, the World Bank said the deteriorating economic situation in the country “will likely be most deeply felt by poor households”.

“In Zimbabwe, without substantial improvements in the allocation and efficiency of public spending, the recovery could well be regressive — increasing inequality rather than further dampening it,” the World Bank statement said.

The Washington-based multilateral lender said for Zimbabwe to raise growth from its current medium term trend of 2-3 percent, the country will need to correct key macroeconomic imbalances.

World Bank country director Guang Chen said for Zimbabwe to unlock fresh capital, it must fulfil its commitment to clearing some arrears to multilateral institutions in 2016 using its own resources and loans.

“The authorities’ push towards re engagement will allow the (World) Bank to do more to help Zimbabwe face the coming headwinds, and ensure that the growth and recovery is pro-poor,” Chen said.

Zimbabwe, which has not received financial support from the International Monetary Fund (IMF), World Bank and African Development Bank since 1999 due to its failure to settle its debt, is currently working on a cocktail of economic strategies geared at clearing its combined $1,8 billion in arrears owed to financial institutions.

Comments (7)

As part payment for the arrears to the International financial institutions I have this suggestion: Thathani i$800K eyeMasvingo bash kamdala and channel it there. I know ukuthi ubab uPresident won't mind such a brilliant idea.

Mabhengeza - 12 February 2016

Economy is wht we must focus on now.the economic outlook is not good.1 big let down is ministry of small medium enterprises .theris no ministry to talk about.those people r passive n fast asleep.this is whr take off shuld be initiated wth vigoure.china turned to its micro business to develop its economy.so did malasia,tanzania.why this ministry of ours is not visible beats me.when yu look at mbare,chitwn,bulawayo,mutare n all twns business thr is small n medium.they r mo visible than big business.government needs to revamp this ministry tgether wth zimra to invest in small businesses.presently the attitude of zimra is nt helping small businesses.

viola gwena - 13 February 2016

Whr will the money to invest in small business cme from ,viola.yo govenmnt is broke.good idea bt no zeal.

diva - 13 February 2016

Yes no money ,bt the little thats thr need to be channeld to medium business.bt 1st need is to invest in human capital at this ministry.the officers that r thr r too timid.not interested in anything.the minister herself unheard.we need planners at this ministry.youngsters wth M.B.As shuld move in.a seriouse revamp of the ministry.

viola gwena - 13 February 2016

Channel the birthday money to this ministry.a good start.

eddy cros - 13 February 2016

Is that all viola,thats yo idea of revamping economy.or team lacoste idea.

bantu - 13 February 2016

Jobs is the parramount issue.top target.we must create jobs for our children.wth jobs in mind ,channeling resourses to small businesses is the ideal thing.what happened at zisco steel shuld never again be allowed to hapen.those indians shuld hav been given the company n create jobs.welshman let us down.big time.it was saboteg.a whole twn culd hav been employed.so jobs is what we must invest in.

viola gwena - 13 February 2016

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