Economy to grow 3,2pct, World Bank

via Economy to grow 3,2pct, World Bank – NewZimbabwe 15 January 2015

ZIMBABWE’S economy will grow by 3,2 percent this year — faster than the global average — and pick up to 3,7 percent next year, the World Bank said in its latest global report.

The projection is in line with government estimates that have also put gross domestic product growth projections at 3,2 percent for 2015.

In its Global Economic Prospects 2015 report published under the theme, “Having fiscal space and using it,” the financial agency said the global economy would grow by three percent this year from 2,6 in 2014 and by 3,3 percent next year.

According to the report, Zimbabwe’s economy will grow by 3,4 percent in 2017 on the back of a stability and growth in commodity prices.

A decline in commodity prices would however hit hard on the country’s trade balance as well as that of the rest of sub-Saharan Africa which would call for “significant policy changes.”

“Fiscal buffers need to be rebuilt to ensure the effectiveness of fiscal policy in the future,” said Basu.

The report comes hardly a month after the Breton Woods institution rekindled its relationship with Zimbabwe after having financially isolated the country for over a decade.

The global development agency suspended aid to Zimbabwe in 2000 after it defaulted on its arrears but announced in December it would assist Zimbabwe mobilise resources for various development programmes through a multi-donor trust fund it has named the Zimbabwe Reconstruction Fund (ZimRef).

The World Bank, which last year twice revised its GDP growth projections for the country, is expecting to raise $100 million for ZimRef this year.