Business / Economy
Zim growth to decelerate to 4,4 percent
29 May 2012 at 06:18hrs | Views
Zimbabwe's real Gross Domestic Product (GDP) will slow down to 4,4% this year from 6,8% in 2011 owing to challenges facing the economy, according to a latest African Economic Outlook report released Monday.
The decline in growth is attributed to high cost of capital and inconsistencies especially on the indigenisation regulations, the report said.
It also said obsolete technologies and power and water shortages militate against the growth of the economy.
"These downside risks are further exacerbated by the disputes among the government partners about the new constitution, the national referendum to adopt it and pending national elections," the report said.
The International Monetary Fund (IMF) recently said the country would register real GDP growth rates of 4, 7% and 6, 3% this year and 2013 respectively.
However, the report has some good news: Zimbabwe would register a real GDP growth of 5,5% driven by the agricultural, mining, manufacturing and transport sectors.
The report said inflation, once the country's number one enemy before it was tamed by the use of multi-currencies, would rise but projected to remain within single digit levels this year and 2013.
"Overall, inflationary developments in the short to medium term will continue to be influenced by the USD/ZAR (South African Rand) exchange rate, inflation developments in South Africa, international oil prices and local utility charges," the report said.
Zimbabwe's annual inflation is 4,03% as in April and there are fears it would surpass the 4,5% year- end target.
According to IMF World Economic Outlook, Zimbabwe's inflation would end the year at 6,2% before coming down to 5,1% by the end of 2013.
It also said obsolete technologies and power and water shortages militate against the growth of the economy.
"These downside risks are further exacerbated by the disputes among the government partners about the new constitution, the national referendum to adopt it and pending national elections," the report said.
The International Monetary Fund (IMF) recently said the country would register real GDP growth rates of 4, 7% and 6, 3% this year and 2013 respectively.
However, the report has some good news: Zimbabwe would register a real GDP growth of 5,5% driven by the agricultural, mining, manufacturing and transport sectors.
The report said inflation, once the country's number one enemy before it was tamed by the use of multi-currencies, would rise but projected to remain within single digit levels this year and 2013.
"Overall, inflationary developments in the short to medium term will continue to be influenced by the USD/ZAR (South African Rand) exchange rate, inflation developments in South Africa, international oil prices and local utility charges," the report said.
Zimbabwe's annual inflation is 4,03% as in April and there are fears it would surpass the 4,5% year- end target.
According to IMF World Economic Outlook, Zimbabwe's inflation would end the year at 6,2% before coming down to 5,1% by the end of 2013.
Source - radiovop
