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.