Zimbabwe’s economy is projected to shrink to at least -9 percent in 2020 due to the effects of the coronavirus, local private sector business lobby body, Zimbabwe National Chamber of Commerce has said.
This will be the heaviest fall of the economy since 2009 follow last year ‘s low of -6.5 percent.
Zimbabwe has enforced a 21 day lockdown which has been extended by 14 days bringing economic activity to a standstill.
“Given the impact of covid-19 which has resulted in contraction of economic activity across all sectors we project that the economy is going to decline by at least – 19 percent in 2020,” ZNCC said.
In its survey constituting 44 percent of respondents from the services sector, 40 percent from manufacturing, 8 Percent from retail, 5 percent from construction and 3 percent from other sectors of the economy, companies had lost an average of Zwl 2.5 million during the 21 days in lockdown.
Businesses could lose more revenue following the extension of the lockdown, it added.
This is expected to affect the fiscal revenue as well.
“As a result we project a budget deficit of more than 5 percent of GDP. Government expenditure is going to increase due to the effects of Covid-19,” ZNCC warned.
The tourism sector has already been identified as the worst hit by the crisis.
Zimbabwe was already going through the worst economic crisis in more than 10 years before the coming of the coronavirus pandemic.
High inflation, currency instability and weak productivity levels in key sector of the economy such as agriculture, mining and manufacturing are likely to compound matters for the economy.