World Bank optimistic of Zimbabwe’s growth potential

Zimbabwe’s real GDP growth will expand 3,7 percent in 2019, according to World Bank projection, putting it above Government’s own estimates of 3,1 percent.

The country’s growth projection according to the World Bank is in line with sub-Saharan Africa’s average of 3,7 percent.

In his 2019 National Budget Statement, Finance and Economic Development Minister Mthuli Ncube, projected the country’s economy to grow by 3,1 percent, lower than the estimated 2018 growth rate of 4 percent.

Economic growth for 2019 is anticipated to be at about 3,1 percent, which is slightly lower than the 2018 expected growth of 4 percent, reflecting the impact of unfavourable weather on agriculture and macro-fiscal vulnerabilities from previous unsustainable fiscal and current account deficits, said Prof Ncube in his budget statement.

The World Bank also puts Zimbabwe’s 2020 and 2021 growth projections at 4 percent each, which is lower than the bullish 7 percent anticipated by Government for 2020.

“Beginning 2019, fiscal consolidation measures are, however, expected to give a strong rebound in growth to above 7 percent from 2020,” said Prof Ncube.

In the sub-Saharan region, the World Bank, which published its annual Global Economic Prospects on Tuesday, said Angola and Nigeria — which make up the region’s largest economies together with SA — would also face relatively weak growth in 2019, with a projection of 2,9 percent for Angola and 2,2 percent for Nigeria.

South Africa’s real GDP growth will expand by a paltry 1,3 percent in 2019, a downgrade from June 2018’s estimate of 1,8 percent. This has dragged down the region’s average growth to 3,7 percent.

Among other African countries, growth would generally be “solid”.

“Among non-resource-intensive countries, economic activity is expected to remain robust in fast-growing countries, such as Cote d’Ivoire, Kenya, and Tanzania, boosted by public investment and strong agricultural production, and in smaller economies, such as Madagascar, on the back of solid export performance.

“While growth in Ethiopia is expected to remain strong, it will be weighed down by fiscal consolidation efforts to stabilise public debt.”

The bank expects global growth of 2,9 percent in 2019.

In all, global growth is projected to moderate from a downwardly revised 3 percent in 2018 to 2,9 percent in 2019 and 2,8 percent in 2020-21, as economic slack dissipates, monetary policy accommodation in advanced economies is removed, and global trade gradually.