ZIMBABWE’S economy is expected to grow by 4%, two percentage points down from Treasury projections dragged by weakening commodity prices, the World Bank has said.
Bernard Mpofu,Acting Business Editor
In its economic briefing for November, the World Bank country office said agriculture may rebound in the coming year anchored by growth in maize and cotton output.
Zimbabwe’s growth is estimated at 3% in 2013, down from 5% initially projected due to underperformance of agriculture and the manufacturing sector. Experts say growth performance has been dampened by the continued slowdown of the key sectors of the economy, amidst easing international commodity prices, low investment, tight credit conditions and policy uncertainty in the election year .
The World Bank said Zimbabwe’s 2014 -2015 growth potential could be boosted by stronger policy coherence, improved business climate and overall improvement in the provision of basic services to firms and individuals.
The World Bank 2014 economic growth rate projection is less than the 6% forecast made by Finance minister Patrick Chinamasa at a pre-budget workshop recently. The Finance minister said a new economic blueprint adopted by the ruling party last month was expected to stimulate economic growth across all sectors.
“Amidst uncertainty around mineral prices and recovery in the agricultural sector, the baseline projections forecast economic growth at 4,2% in 2014,” read the World Bank research note.
“After a 1,3% contraction in 2013, agriculture is expected to rebound in 2014, and grow by 7,3%. Early data on the prospects of the next agricultural season indicate potential for a rebound in the maize sector, and normal rainfall could underpin a production of about 1200 tonnes, up 50% from the last season, reaching the 2009 production levels. The cotton sector presents some potential for recovery following last year negative season.”
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The traditionally resilient cotton sector, which traversed almost unscathed the tumultuous decade-long crisis, slumped in 2013, with an estimated 108 832 tonnes compared with 350 000 tonnes in 2012 as many farmers switched over to other crops in response to lower 2012 prices. Agriculture, like other key economic sectors has been affected by funding constraints related to the country’s huge debt overhang and perceived country risk.
The stock of verified external debt according to Chinamasa currently stands at about $6,5 billion, of which about $4,2 billion are arrears. This remains an albatross constraining any new financing.
