World Bank optimistic about Zimbabwe economic growth

Zimbabwe’s economy grew by 0.4 percent in 2016 and could accelerate by 3.8 percent this year, higher than the regional average, the World Bank has said in its latest report.

The projection contrasts sharply with the International Monetary Fund (IMF) which expects the GDP to record a growth of -2.5 percent this year in the absence of reforms and new money while the government forecast a GDP growth of 1.8 percent over the same period.

The World Bank did not explain the basis of such a prediction.

The report titled: Global Economic Prospects, noted that the Sub-Saharan Africa economies growth rate slowed to 1.5 percent in 2016, the weakest pace in over two decades but are expected to pick up to 2.4 percent this year, as commodity exporting economies adjust to low prices.

South Africa and oil exporting countries, which contribute two-thirds of regional output, accounted for most of the slowdown, while activity in non-resource intensive economies generally remained robust.

The impact of low commodity prices is seen continuing throughout 2017, though some recovery is expected.

“South Africa is expected to edge up to 1.1 percent this year while Nigeria is forecast to rebound from recession and grow at a rate of 1 percent, as an anticipated modest improvement in oil prices, coupled with an increase in oil production, boost domestic revenues.

“Angola is projected to expand at a moderate 1.2 percent pace as high inflation and tight policy continue to weigh on consumption and investment. In other mineral and energy exporters, the outlook is generally favorable,” reads the report.

The World Bank also notes that the heightened policy uncertainty in the United States and Europe could cause financial market volatility, affecting borrowing costs and capital flows to the region.

“A reversal of flows to the region would hit heavily traded currencies, like the South African rand, hard. A sharper-than-expected slowdown in China could weigh on demand for export commodities and undermine prices,” the report reads.- The Source

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