Zimbabwe's economy to remain flat at 1.5 pct in 2016: WB
Xinhua, February 4, 2016 Adjust font size:
Zimbabwe's economic growth is expected to remain at 1.5 percent in 2016 due to drought, but will quicken thereafter bolstered by consistent growth in services and recovery in agriculture, the World Bank said on Wednesday.
"Zimbabwe's economic outlook is subdued, and growth is projected to remain at 1.5 percent in 2016 as El Nino related weather conditions depress agricultural output, but growth is expected to revert to trend growth of 2-3 percent in 2017-2018," the WB said in its first ever Zimbabwe Economic Update launched in the capital.
Zimbabwe recorded 1.5 percent growth in 2015, down from 3.8 percent in 2014 weighed down by poor performance in key agriculture and mining sectors.
Zimbabwe's economy is largely dependent on agriculture which contributes roughly 20 percent to GDP.
In the report, the WB said the country's dependence on limited range of key sectors, weakening commodity prices on the international market and further depreciation of the South African Rand against the U.S. dollar could put Zimbabwe's recovery at risk.
South Africa is Zimbabwe's largest trading partner, and Zimbabwe is currently using multiple currencies after abandoning its hyperinflation ravaged currency in 2009. The U.S. dollar is the dominating currency in the economy.
The WB said low investment, a large current account deficit and low growth posed serious challenges to economic growth.
Clearing external debt arrears was important to Zimbabwe's medium-term growth trajectory, the WB said, adding the country had enormous potential for inclusive growth due to its strong human capital base.
Zimbabwe last year struck a deal to clear its 1.8 billion U.S. dollars arrears to multilateral creditors -- International Monetary Fund, World Bank and the African Development Bank.
The World Bank welcomed the renewed commitment by Zimbabwe to address the longstanding arrears to its preferred creditors, as a first step toward resolving its broader arrears and regaining debt sustainability, said WB country manager for Zimbabwe Chen Guangzhe.
He urged Zimbabwe to continue with reforms on investment climate to attract much needed foreign investment. Enditem