HARARE (Bloomberg) –Zimbabwe’s Treasury is sticking to its growth estimate of 7.4%, even after the nation’s president said the projection would have to be revised.
The forecast is “achievable” after the country had good rains that will boost farm output to the highest in four years, Finance Minister Mthuli Ncube said in an interview Tuesday with Bloomberg Television. The International Monetary Fund expects the economy to grow 3.1% this year, after contracting for the past two.
“Zimbabwe is coming through this recovery phase quite well,” Ncube said. “Mining remains strong. Our infrastructure investment program is also quite strong. There’s really a recovery across the board, except the tourism sector.”
President Emmerson Mnangagwa said at the weekend the Treasury would “have to revise” its projection because of expectations that new waves of coronavirus infections will curtail economic output.
READ: Zimbabwe President Says ‘Fight Still On’ to Fix Broken Economy
The southern African nation has annual inflation of 241%, foreign-currency shortages and the disposable incomes of most workers who earn in local currency has shrunk. The Zimbabwe dollar now trades at 84 to the U.S. dollar after being pegged at parity just two years ago. The gap between the official exchange rate and parallel market has widened by 36%, with a U.S. dollar selling for 115 Zimbabwean dollars on the streets of Harare.
The gap between the official rate and the parallel market rate is “within global norms,” Ncube said. “It used to be as high as 300%.”