Economic outlook uncertain, World Bank

via Economic outlook uncertain, World Bank 08/11/2013  by Roman Moyo NewZimbabwe

THE World Bank says Zimbabwe’s economic performance has been dampened by the continued slowdown of key sectors of the economy, amidst easing international commodity prices.

The bank said the 2014/15 outlook for the country’s ailing economy remains increasingly uncertain due to a host of internal and external factors.

In an update on the country’s economic performance, the WB said the rate of growth would greatly depend on the outcome of the agricultural season, international prices, and effective stabilization of levels of confidence of domestic investors.

Growth in Zimbabwe was rapidly fading, and after the 4,4 percent uptick recorded in 2012, growth projections for 2013 have been revised downwards to three percent, with little prospects for a recovery in 2014.

“Zimbabwe’s 2014-2015 growth potential could be boosted by stronger policy coherence, improved business climate, and overall improvement in the provision of basic services to firms and individuals,” the WB said.

The economy faces uncertainty from expected volatility in the global economy and, on the domestic front, worsening macroeconomic indicators and increased vulnerability of the banking sector.

As Zimbabwe’s external position has been supported by substantial short-term capital inflows, the situation would be compounded by the risk of capital outflows from emerging markets, as the United States Federal Reserve progressively unwinds its expansionary monetary policy.

Growth performance has been stymied by continued slowdown of the key sectors of the economy, amidst easing of international commodity prices, low investment, tight credit conditions, and policy uncertainty after the July elections.

According to World Bank, agriculture negatively impacted growth in 2013, and slightly contracted (-1.3 percent).

“The performance of the 2013 season has been largely below initial projections following the strong contraction in maize and cotton, due to the drought season; lower hectarage plated and subdued yields,” the bank said.

“Maize declined by 17,5 percent to reach 798 600 tons in 2013 which is 56 percent below the national requirement of 1.8 million tons.”

World Bank said the traditionally resilient cotton sector, which traversed almost unscathed the tumultuous decade long crisis, slumped in 2013, with an estimated 108 832 tons compared with 350 000 tonnes in 2012 as many farmers switched over to other crops in response to lower 2012 prices.

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Manufacturing sector growth is projected at 1,5 percent amidst low levels of investment, declining competitiveness and tight credit conditions.

Economist said the expected increased volatility of commodity prices could affect Zimbabwe’s export growth, worsening the current account deficit, shrinking fiscal revenues and upsetting the economic recovery process.

 

COMMENTS

WORDPRESS: 8
  • comment-avatar

    In actual fact the world Bank/imf are just being diplomatic and politically correct. Ask any proper economic analyst and they will confirm its only Bretton woods parlance for saying that mugabelanders economy is f….d and will collapse effectively in 2015. Read between the lines idiots

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    maisokwazo 8 years ago

    I don’t know how many times are we going to be told that Zimbabwe has gone to the dogs and that Zimbabwe is doomed, real doomed with these cohorts in power. No matter how their mouthpiece the Herald put it Zimbabwe is doomed. No NEW investments except from Chiyangwa who can pay the Harare city council workers pay in return for vast swats of land. Those who have mastered the art and game of thievery and those who have harnessed corruption as the mode of survival are thrilled and think they are thriving yet the gullible, the majority are lamenting and languishing in their poverty and hunger without any hope of light at the end of the tunnel.

    Rains aren’t falling and if and when the rains falls the majority are not prepared for it with no seed and or farming implements and inputs in place. IMF and World Bank won’t offer any new loans nor any new lines of credit to an already over stretched, debt ridden and corrupt regime. Zambia won’t deliver on promised maize. Air Zimbabwe is insolvent and can not pay Econet $1000 it owes and will not fly to Dubai and China is nowhere to be found except where they are busy looking for other diamond infested areas and elephant sanctuaries to poison for ivory. ZIMBABWE IS SCREWED INDEED VERY SCREWED.

    • comment-avatar
      Pastor 8 years ago

      And we all know love is a glass which makes even a monster appear fascinating.The only thing necessary for the triumph of evil is for good men to do nothing.All tyranny needs to gain a foothold is for people of good conscience to remain silent.Those who don’t know history are destined to repeat it.Nobody made a greater mistake than he who did nothing because he could do only a little.
      Read more at http://www.brainyquote.com/quotes/authors/e/edmund_burke.html#T0VhQ1IUukq214uw.99

    • comment-avatar
      Pastor 8 years ago

      And we all know love is a glass which makes even a monster appear fascinating.The only thing necessary for the triumph of evil is for good men to do nothing.All tyranny needs to gain a foothold is for people of good conscience to remain silent.Those who don’t know history are destined to repeat it.Nobody made a greater mistake than he who did nothing because he could do only a little.

    • comment-avatar
      Jambanja paSalisbury 8 years ago

      Even Chiyangwa wacho ari pa tight! Talk to him. USD usaridherere, hapachina nyaya yeku BURNER !

  • comment-avatar
    BossMyass 8 years ago

    The foundation for any economy is the ability to support itself by utilizing its natural resources, usually from the agricultural sector. If a country cannot supply itself, or trade for food, then there is no need for gold or electronics. According to the World Heath Organization, about half of Zimbabwe is starving to death2 due to the failing agricultural sector.
    Prior to 2000, agriculture was the backbone of Zimbabwe’s economy, but there was a scarcity of useful farming land and a great disparity between the quality of land owned by black and white Zimbabwean farmers. White Zimbabweans had controlled a majority of the arable land (which only accounts for 8.24 percent of the total land in Zimbabwe3) since Zimbabwe was colonized by Britain. The land was used for both private and commercial purposes, but the commercial sector was a huge proponent to Zimbabwe’s agricultural stability. Black Zimbabwean farmers, however, were living on land that was arid and infertile. Because of the social and economic inequalities, the Zimbabwean Government was faced with growing discontent amongst the population.
    Mugabe attacked the West for having a hand in Zimbabwe’s ills. For all the years he has done this, one would have thought Mugabe wants nothing to do with the West, especially Britain. Unsurprisingly enough, Mugabe suffers colonial last in his personal life and order as we saw him arriving in a vintage British Bentley surrounded by police on horseback wearing colonial style pith helmets. He failed to mention the scourge of corruption that has resulted in Zimbabweans living in sham conditions. As we speak, the cities of Bulawayo and Kwekwe have gone for many weeks without proper water supplies reflecting Mugabe’s mismanagement. While others may feel that it is not Mugabe’s problem, under his watch corruption has taken root in our country and those responsible seem to have unending impunity. The harsh economic times that global markets are experiencing, the word ‘economy’ has come to be closely associated with concepts of money. What is often forgotten is that the science of economics is a much broader field that encompasses how scarce resources are disbursed throughout a population.

  • comment-avatar
    William Doctor 8 years ago

    “According to World Bank, agriculture negatively impacted growth in 2013, and slightly contracted (-1.3 percent).”

    What? Just when Zanu and communist academics were telling us that the agrarian revolution was a success. God damn man. I guess we’ll all just ignore the fact that Zimbabwe fed itself from 1980-2000 [except for the 1992 drought]. Or maybe we’ll all quietly ignore the fact that some of the former farmers are now in Zambia – growing maize – that ends up in Zimbabwe.

  • comment-avatar
    Chivulamapoti 8 years ago

    Botswana, Mozambique, Ghana, Nigeria, Zambia all have the displaced Zimbabwean farmers, and their agricultural sectors are doing very well. ZANU-PF blames drought, but RSA, Zanbia etc have the same rains generally grow fine crops.
    “You cannot make a silk purse out of a sows ear”.