HARARE- The African Development Bank (AfDB) mesmerising in cloud cuckoo land, is anticipating a strong GDP growth for Zimbabwe for 2019 which is way off Zimbabwe government’s own projection and in complete opposite of the IMF as well as other independent forecasts.
In its Africa Economic Outlook 2019 report released over the Easter Holidays, the regional lender said it expects a GDP growth of 4.2% in 2019 for Zimbabwe which is ahead of the prior year estimate growth of 3.2%.
Global multilateral lender IMF however, projects a negative growth of -5.2% for the year and a recovery in 2020 which is in line with Equity Axis analysts’ projection of a -3.2% growth which if incurred will be worst recession in a decade.
The worst GDP out turn since 2009 was that of 2016 which came in at just above 0 percent. Zimbabwe’s government projects a positive growth of 3% which is a revision from a formative projection of 6% earlier in 2018 and a 9% GDP growth according to the TSP of October 2018, which is a 2 year economic policy paper position.
The Africa Development Bank’s projection is clearly misinformed and lacks substance. It is premised on the TSP, which 6 months on since its promulgation, lags targets.
According to the TSP, inflation is expected to close 2019 at 5% while GDP was anticipated to grow by 9%.
The economy has significantly shifted since its adoption as a policy strategy in October 2018. The introduction of a new currency, liberalization of the exchange rate, suspension of industry protection as well as the 2% intermediated money transfer tax have come into effect, thus disrupting the projection.
These shifts coupled with weak exchange rate and rampant inflation, has driven the economic situation to a worse off position risking a deeper recession, which by now is a given.
Equity Axis News
Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment.