The International Monetary Fund (IMF) has announced that Zimbabwe’s Gross Domestic Product (GDP) growth is expected to decline by about half of its 2021 levels to around 3.5 percent in 2022, after a delegation completed a mission to the Southern African country on Monday.
Despite a resurgence in mining and tourism, IMF blamed the decline on a slowdown in agricultural and energy outputs; because of irregular rains and growing macroeconomic volatility.
The IMF noted that there is still a lot of uncertainty; and that the country’s forecast will rely on how external shocks develop, the direction of policy, and the implementation of inclusive growth-friendly measures.
“The IMF mission notes the authorities’ efforts to stabilize the local foreign exchange market and lower inflation. In this regard, the recent tightening of monetary policy and the contained budget deficits are policies in the right direction; and have contributed to the narrowing of the parallel market exchange rate gap,” IMF delegation head Dhaneshwar Ghura said.
“Further efforts are needed to durably anchor macroeconomic stability and accelerate structural reforms.”
The economy of Zimbabwe has been declining for almost 20 years.
According to the IMF, there were once again pressures on prices and exchange rates to depreciate; particularly in the second quarter of 2022, when inflation reached 285 percent over a year earlier.
The Washington-based lender offers considerable technical support to Zimbabwe in the areas of macroeconomic statistics, banking sector reforms, and economic governance. However, because of unmanageable debt and formal external arrears, it is unable to give Zimbabwe financial support.