Business / Economy
Mixed fortunes for Zimbabwe economy
30 Dec 2011 at 00:27hrs | Views
Economic experts say Zimbabwe's economy has experienced a mixed set of fortunes in 2011 on the back of financial challenges affecting industry and households.
As the year 2011 comes to end economic experts argue that although there were significant gains in some key economic sectors there were also notable challenges that hindered economic growth.
While government had projected the economy to register a 9,3% growth rate this year, limited funding, constrained revenue inflows with inadequate disposable incomes and resurfacing macro- economic pressures created challenges for consumers.
Taking into account the fact that the Mining and Agriculture sectors performed beyond expectations, an Economist, Mr. David Mupamhadzi says Government and the private sector should focus on policies to restore business confidence.
"It has been a year of mixed fortunes and we hope for the better next year," Mupamhadzi said.
Given the fact that banks continue to charge short term loans at prohibitive rates it was also difficult for companies to borrow in order to finance working capital requirements.
While industry is slowly recovering , the International Freight Forwarders Association of Zimbabwe, Mr. Patrick Gwasera says the high costs of production for Zimbabwe's firms compared to other regional countries is a key challenge that needs urgent attention.
"We are of the view that everything will move positively next year," said Gwasera.
Although inflation continues to be in the positive and single digit levels, other constraints to productivity are mainly in the form of rising costs of utility bills.
Furthermore the economy's capacity to sustain key productive requirements remains questionable on the back of a projected US$700 million budget deficit.
While the economy is poised to register a 9, 4 percent growth next year buoyed by the anticipated 600 million dollar revenue inflows from diamonds it remains to be seen whether challenges that affected key economic sectors will be solved in 2012.
As the year 2011 comes to end economic experts argue that although there were significant gains in some key economic sectors there were also notable challenges that hindered economic growth.
While government had projected the economy to register a 9,3% growth rate this year, limited funding, constrained revenue inflows with inadequate disposable incomes and resurfacing macro- economic pressures created challenges for consumers.
Taking into account the fact that the Mining and Agriculture sectors performed beyond expectations, an Economist, Mr. David Mupamhadzi says Government and the private sector should focus on policies to restore business confidence.
"It has been a year of mixed fortunes and we hope for the better next year," Mupamhadzi said.
Given the fact that banks continue to charge short term loans at prohibitive rates it was also difficult for companies to borrow in order to finance working capital requirements.
While industry is slowly recovering , the International Freight Forwarders Association of Zimbabwe, Mr. Patrick Gwasera says the high costs of production for Zimbabwe's firms compared to other regional countries is a key challenge that needs urgent attention.
"We are of the view that everything will move positively next year," said Gwasera.
Although inflation continues to be in the positive and single digit levels, other constraints to productivity are mainly in the form of rising costs of utility bills.
Furthermore the economy's capacity to sustain key productive requirements remains questionable on the back of a projected US$700 million budget deficit.
While the economy is poised to register a 9, 4 percent growth next year buoyed by the anticipated 600 million dollar revenue inflows from diamonds it remains to be seen whether challenges that affected key economic sectors will be solved in 2012.
Source - Zbc News
