Abu Dhabi, UAETuesday 20 October 2020

CORONAVIRUS

Zimbabwe bullish on economic recovery in 2021 on the back of limited Covid-19 impact

GDP is expected to expand by 7.4% after contracting by about 4.5% this year

Crowds of people throng a market place in Mbare, Harare, Zimbabwe. The country generates the bulk of its foreign currency earnings from exports of tobacco, gold and platinum. EPA
Crowds of people throng a market place in Mbare, Harare, Zimbabwe. The country generates the bulk of its foreign currency earnings from exports of tobacco, gold and platinum. EPA

Zimbabwe’s economy is forecast to rebound in 2021 as the country shrugs off the effects of the coronavirus pandemic and the government takes further measures to stabilise the currency, finance minister Mthuli Ncube said.

Gross domestic product is expected to expand by 7.4 per cent after contracting by an estimated 4.5 per cent this year, Mr Ncube said in a budget strategy paper presented to reporters and businesspeople on Friday in the capital, Harare.

Growth next year will be anchored by agriculture and mining, which forecast to grow by 11.3 per cent and 11 per cent respectively, he said.

The country generates the bulk of its foreign currency earnings from exports of tobacco, gold and platinum.

Inflation, which eased to 659 per cent in September – the second straight decline from a July peak of 837 per cent – is expected to reach 134 per cent by the end of the year, supported by weekly foreign currency auctions, Mr Ncube said.

Highlights

  • The wage bill for government workers will be managed in line with budget capacity and inflation. The target is to contain employment costs below 50 per cent of total expenditure.
  • The introduction of a market-based foreign exchange auction system will be supported by the carrying out of “strong fiscal and monetary policies for stabilising inflation, and the preservation of the external value of the local currency.”
  • The budget to be presented in November will outline plans to offset the loss of value arising from currency reforms. In February last year the government abandoned the local unit’s 1:1 to the dollar and four months later the Zimbabwean dollar was reintroduced as sole legal tender.

Updated: October 19, 2020 05:28 PM

THE DAILY NEWSLETTER
Sign up to our daily email