Zimbabwe’s economy to shrink by 4.5%, says finance minister

Finance minister Mthuli Ncube wore a face shield while making mid-term budget statement in Parliament on Thursday
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HARARE, Zimbabwe (AP) — Zimbabwe’s economy is expected to shrink by 4.5% this year, the country’s finance minister said Thursday, although others say it will contract even more, as the effects of the coronavirus and a drought take a toll on the struggling southern African nation.

The projection by Finance Minister Mthuli Ncube is much less than the more than 10% decline forecast by the International Monetary Fund.

Tourism, one of Zimbabwe’s country’s biggest foreign currency earners, was worst affected by the pandemic that has stopped almost all visitors from Asia, Europe and North America, Ncube said to parliament.

Zimbabwe’s economy was already in the doldrums before the coronavirus, beset by rising inflation, the declining value of the local currency, high unemployment, and acute shortages of water, electricity and gas.

Inflation is more than 700%, the world’s second-highest after Venezuela. The value of Zimbabwe’s local currency has been quickly declining, eroding the worth of salaries and resulting in frequent strikes by government workers.