News / National
RBZ predicts further Zimbabwe economic downturn
06 Sep 2024 at 14:42hrs | Views
The Reserve Bank of Zimbabwe (RBZ) has revised its 2024 economic growth forecast down to 2%, citing the severe drought's impact on economic activity.
This is a sharp decline from earlier estimates, including a 3.5% forecast in April and a 5.3% forecast in November 2023.
The drought has also threatened power shortages, potentially affecting the Kariba South hydroelectric plant and worsening Zimbabwe's economic challenges, which include exchange rate volatility, a liquidity crunch, and weak global commodity prices.
Despite these challenges, RBZ Governor John Mushayavanhu expressed optimism, highlighting resilience in sectors like construction, mining, and tourism.
He anticipates a stronger economic rebound in 2025, with growth expected to exceed 6%, driven by improvements in monetary conditions and agricultural recovery.
However, experts remain cautious, noting concerns about the sustainability of the country's monetary policies.
While the introduction of a new currency has brought stability, analysts warn that pegging the exchange rate could lead to complications in managing the money supply and interest rates.
This is a sharp decline from earlier estimates, including a 3.5% forecast in April and a 5.3% forecast in November 2023.
The drought has also threatened power shortages, potentially affecting the Kariba South hydroelectric plant and worsening Zimbabwe's economic challenges, which include exchange rate volatility, a liquidity crunch, and weak global commodity prices.
Despite these challenges, RBZ Governor John Mushayavanhu expressed optimism, highlighting resilience in sectors like construction, mining, and tourism.
He anticipates a stronger economic rebound in 2025, with growth expected to exceed 6%, driven by improvements in monetary conditions and agricultural recovery.
However, experts remain cautious, noting concerns about the sustainability of the country's monetary policies.
While the introduction of a new currency has brought stability, analysts warn that pegging the exchange rate could lead to complications in managing the money supply and interest rates.
Source - the independent
