'World Bank offside on Zim'

HARARE - The World Bank’s prediction that Zimbabwe’s economy will grow by 3,8 percent this year is not only incorrect but also misleading, economic experts have said.

This comes as the Bretton Woods institution in its Global Economic Prospects report titled “Weak Investment in Uncertain Times”, which was released last week, noted that the Zimbabwean economy will also grow by 3,4 percent in 2018 and 2019.

However, the overly optimistic outlook for 2017 exceeds Finance minister Patrick Chinamasa’s projected 1,7 percent growth prediction and the International Monetary Fund’s negative 2,5 percent forecast, forcing economic analysts to question the World Bank’s report.

International think-tank NKC Research said the country’s economy will remain depressed in 2017 due to adverse consequences of liquidity challenges, subdued domestic demand and low foreign direct investment.

“Furthermore, due to government’s refusal to implement aggressive austerity measures to free up resources from the public sector wage bill, economic growth will be constrained as the country forgoes the high public sector multiplier effect from capital spending,” NKC’s analyst Chantelle Matthee said.

Zimbabwe has been gripped by a liquidity crisis that’s forced the government to pay its workers late in recent months.

Exacerbating the uncertainty is the speculation over the health and longevity of President Robert Mugabe, whose every public appearance is now scrutinised for signs of physical weakness, mental confusion or exhaustion.

While Mugabe, who turns 93 next month, has looked shaky at times, he maintains a busy schedule of international travel.

Despite being on his annual leave, the nonagenarian this month held bilateral talks with China’s president Xi Jinping in Beijing before he travelled on official business to Mali for the two-day France-Africa Summit.

From Mali, it is believed Mugabe will also travel to Ethiopia for the 28th Ordinary Session of the summit of the African Union in Addis Ababa from January 22 to 31.

Even as Zimbabwe’s economy implodes and dissent rises, Mugabe’s ruling Zanu PF has remained clueless in reviving the economy, preferring instead to focus on deadly factional fights.

Industries are closing down, worsening unemployment where more than two-thirds of the population of 13 million survive on informal work, according to the African Development Bank.

People line up for hours at banks to access their money as currency woes deepen.

Market experts said the country’s large fiscal shortfall and rising public debt were crowding out private investment and adversely impacting liquidity, hence weighing on economic growth.

Comments (1)

The World Bank's forecasts could be the correct one because their position is normally supported by detailed reports from outside the cities and not based on refined information from statics agencies that do not take into account developments taking place in the rural areas and various districts across the country. I do not know where this information of closed industries is coming from because if you drive into any industrial area in Harare or any of the cities/towns you will not find any idle factory and also which products are we not finding on supermarket shelves to support this biased finding of negative growth rates and massive unemployment. The population of privately owned cars in Zimbabwe at the moment is not consistent with unemployment levels the unnamed economists are talking about. This 2017 can we be patriotic for a change, the good of our country and our children who are the leaders of tomorrow. Belt tightening is not synonymous with economic meltdown.

Liquidity - 18 January 2017

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