Zimbabwe's dollar inflation to hit 6.6%

Zimbabwe's annual inflation is expected to hit 6.6 percent next year due to rising food prices and election spending the International Monetary Fund has predicted. 

In its World Economic Outlook report released yesterday the IMF said the country will register an inflation rate of at least 3.0 percent this year. 

Economists Prosper Chitambara said Zimbabwe was in a semi-crisis and could end up with fast rising inflation.

Meanwhile, the International Monetary Fund (IMF) continues to be bullish on the 2017 global growth and has marginally reviewed upwards Zimbabwe's real gross domestic product projections from the -2.5% it forecast in its October 2016 outlook to 2%. 

The World Bank's Global Economic Prospects report released in January had forecast that the Zimbabwean economy will grow by 3.8%. In March, government also reviewed 2017 growth from the 1.7% initially announced in the 2017 National Budget to 3.7%, following a better than expected agricultural season and firming metal prices. Zimbabwe's inflation, which last month surged to 0.21%, is expected to close the year at 6.6%, which will be the highest annual average since dollarization. 

Botswana is projected to grow by 4.1%, Malawi 4.5% and Zambia 3.5%. However, South Africa is projected to register a modest growth of 0.8%.

The IMF says significant downside risks continue to cloud the medium-term outlook and one salient threat is a turn toward protectionism which might lead to trade warfare. Zimbabwe has been having problems with neighbouring countries such as South Africa and Zambia, after imposing import controls last year.