The International Monetary Fund (IMF) has cut Zimbabwe’s economic growth forecast to 1,5 percent from the initial projection of 2,8 percent due to drought and declining international metal prices.
IMF head of mission, Domenico Fanizza yesterday told journalists that the 1,5 percent growth was a “very cautious” figure in light of registered slowdown in China’s economy.
He added that the Bretton Woods institution expected the country’s economic growth to slow down even further than anticipated.
“We have of course re-looked at Zimbabwe’s economy and we expect a slowdown in economic activity as a result of drought as well as low prices for Zimbabwe’s exports,” he said.
Since the adoption of a multi-currency system, Zimbabwe has been battling to recover from a recession that was marked by over a billion percent hyperinflation and widespread food shortages and market watchers say the country is headed towards a downturn this year.
The latest revised forecast by IMF comes after Finance minister Patrick Chinamasa in July also revised Zimbabwe’s economic growth rate from 3,1 percent to 1,5 percent due to drought-induced under-performance in agriculture.
Earlier in the year, the World Bank — in its Global Economic Prospects June 2015 Sub-Saharan Africa growth trend released last month — had predicted Zimbabwe’s economy to grow by one percent this year on the back of a sustained liquidity crunch and under performance in all economic sectors.
Economic experts say the downward reviews put a dent on the ruling Zanu PF’s five-year economic blueprint, ZimAsset, which was supposed to drive the country forward at an average growth of 7,2 percent per annum.
Meanwhile, Fanizza, who was leading an IMF mission to undertake the second review of the Staff Monitored Programme (SMP), said Zimbabwe met all its targets for the period to June 2015.
“We believe that the Zimbabwean authorities have worked hard in the reform programme despite a difficult economic and financial position as they have successfully implemented most of the objectives for the period,” Fanizza said.
The latest visit sought to facilitate a platform for the IMF to engage the government and the central bank on issues affecting the economy.
Zimbabwe is under the Bretton Woods institution’s administered SMP, an informal agreement between country authorities and Fund staff to monitor the implementation of the authorities’ economic programme.