EconomyNewsSouthern Africa

IMF doubles forecast for economic growth in Zimbabwe on harvest

The International Monetary Fund almost doubled its economic growth forecast for Zimbabwe, citing a bumper harvest, improved power supply and an increase in manufacturing and construction.

The IMF expects the economy to expand “by about 6%” this year, it said late Wednesday at the end of a two-week virtual staff visit. “An economic recovery is underway in 2021,” it said in an emailed statement.

The forecast compares with a prior prediction of 3.1% growth and is closer to the projection by the southern African nation’s Treasury that gross domestic product will increase 7.4% this year.

In rare praise of the authorities’ policy reforms, the IMF said attempts to contain the nation’s budget deficit, reserve money growth and the introduction of a foreign-exchange auction system signaled Zimbabwe is moving in the right direction.

“Further efforts are needed to solidify the stabilization trends and accelerate reforms,” it said.

Uncertainty remains high in Zimbabwe as the country faces a third wave of the coronavirus infections, the fund said. New measures intended to curb the spread of the virus, including limits on public gatherings, took effect on June 14.

“The outlook will depend on the pandemic’s evolution, the pace of vaccination and implementation of sustainable policies,” the fund said.

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