Zimbabwe economy to grow 7.4%, inflation to close year below 10%

Zimbabwe says despite the coronavirus pandemic, which has so far killed more than 1 400 people, the country’s economy is expected to grow by 7.4% while annual inflation will close the year at below 10%.

Reserve Bank of Zimbabwe governor John Mangudya said this measured optimism is based on the expected significant growth of the agricultural output this year, as a result of the good rainy season, fiscal sustainability and the central bank’s focus on price and financial system stability.

Mangudya said this in his monetary policy statement delivered today which he said was primarily focused on ensuring that inflation is kept under control and that the foreign exchange auction system is sustained to support the growth of the economy.

The National Development Strategy which sets the tone for the country’s development for the next five years set growth for this year at 5%.

Annual inflation in January was 362.6% percent which makes it a tall order to reduce it to below 10 percent by the end of the year.

Mangudya said this inflation path will be underpinned by a targeted month-on-month inflation rate of below 3 %.  Month-on-month inflation last month was 5.4%.

But he added that a lot will depend on the resilience of the hard-working people of Zimbabwe.

“The bank would, therefore, like to express its gratitude to Zimbabweans for their resilience in these very difficult and challenging Covid-19 times,” he said.

“In this context, the bank will continue to use its full range of tools to support the economy in these unprecedented challenging times to foster increased economic activity, employment, as well a price and financial sector stability.”

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