Zimbabwe economy to grow 3.2 percent this year, faster than global average

Zimbabwe’s economy will grow by 3.2 percent this year — faster than the global average — and pick up to 3.7 percent next year, the World Bank said in its latest global report which also shows the world economy was still struggling to recover five years after the financial crisis.

The projection is in line with government estimates that have also put gross domestic product growth projections at 3.2 percent for 2015.

In its Global Economic Prospects 2015 report published under the theme, “Having fiscal space and using it,” the financial agency said the global economy would grow by three percent this year from 2.6 in 2014 and by 3.3 percent next year.

“The global economy is still struggling to gain momentum as many high-income countries continue to grapple with the legacies of the global financial crisis and emerging economies are less dynamic than in the past,” said World Bank chief economist  and Senior Vice President, Kaushik Basu in the biannual report released on Tuesday.

“Lower oil prices will lead to sizeable real income shifts to oil-importing countries from oil-exporting ones. Risks to the global outlook remain tilted downwards.”

According to the report, Zimbabwe’s economy will grow by 3.4 percent in 2017 on the back of a stability and growth in commodity prices.

A decline in commodity prices would however hit hard on the Zimbabwe’s trade balance as well as that of the rest of Sun-Saharan Africa which would call for “significant policy changes.”

“Fiscal buffers need to be rebuilt to ensure the effectiveness of fiscal policy in the future,” said Basu.

The report comes hardly a month after the Breton Woods Institution rekindled its relationship with Zimbabwe after having financially isolated the country for over a decade.

The global development agency suspended aid to Zimbabwe in 2000 after it defaulted on its arrears but announced in December it would assist Zimbabwe mobilise resources for various development programmes through a multi-donor trust fund it has named the Zimbabwe Reconstruction Fund (ZimRef).”

The World Bank, which last year twice revised its GDP growth projections for the country, is expecting to raise $100 million for ZimRef this year.- The Source

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