Economy

Zim’s GDP to grow by 7.4% in 2021

BUSINESS REPORTER  

Zimbabwe’s economy is projected to expand by 7.4% next year from an expected contraction this year, driven by improvements in consumption and investment, Finance and Economic Development minister Mthuli Ncube.

The expansion comes as the economy is forecast to contract by 4.5% this year on effects caused by the Covid-19 pandemic.

The International Monetary Fund this week projected that the economy would contract by 10.4% this year and rebound by 4.6% next year.

In a 2021 pre-Budget Strategy paper unveiled Friday, Ncube said improvements in consumption and investment would account for 2.6% and 5.8% respectively.

“The recovery in consumption is mainly anchored on expected stabilisation of inflation through ongoing policy interventions which should aid restoration of purchasing power of consumers.

Employers including Government will continue to review wages and salaries in line with inflation developments and budget capacity to restore eroded incomes as the economy recovers,” Ncube said.

“Public investment is also expected to contribute 5.1% to GDP growth as Government pushes on some of the projects that stalled during the year.”

Ncube said all sectors of the economy are expected to register positive growth in 2021, with the agriculture and mining sectors expected to record the highest growth rates of about 11% each, and tourism (6.8%) and electricity (10%) among the major sectors.

Early this month, Ncube said he was bullish about the outlook saying the impact of Covid-19 in Zimbabwe was “not as deep as in other countries”.

“I am bullish on the prospects of economic recovery. If we can have a good rainy season, then we know we will import less,” Ncube said in a post mortem of the Transitional Stabilisation Programme which ends this year.

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