Harare – The Reserve Bank of Zimbabwe (RBZ) deputy governor, Kupukile Mlambo has dismissed projections of a possible recession as the country battles another major economic slowdown since experiencing hyperinflation in the year 2008.
In an interview with Equity Axis on the side lines of Confederation of Zimbabwe Industries’ AGM held in the capital last week, Mlambo said the country is only going through a period of transition which among others includes the introduction of an interbank foreign currency market in February 2019 paving way for the liberalisation of exchange rates.
The current economic crisis characterised by acute shortages of foreign currency and cash, short supply of gas, spiking prices and the continuous loss in value of the local RTGS$ to the US$ has prompted a number of economic players and analysts to say the country’s economy is fast heading towards a second recession in a decade.
The International Monetary Fund (IMF) in April revised its Zimbabwe’s growth forecast downwards by a whopping 9 percentage points to -5.2 percent from the initial 4.2 percent projected for 2019, thus predicting a recession for the country.
Since assuming power following the July 2018 general elections, President Emmerson Mnangagwa led government is yet to effectively address the country’s myriad economic challenges.
Worsening these challenges also includes low foreign investment, drought conditions which negatively affected the agricultural output for the past season and lack of structural and political reforms driving corruption and hampering progress in the country.
Government has however, maintained that its policies will bear fruit in the medium to long term.
Presenting the 2019 National Budget in November last year, Finance and Economic Development Minister Mthuli Ncube, projected a 3.1 percent GDP growth for the country.
Government insists that inflation which shot to 75.86 percent in April will fall towards the end of the year.
RBZ also recently announced a US$500 million facility for the interbank foreign exchange market as it seeks to improve access to foreign currency for businesses and individuals.
RBZ governor, Dr John Mangudya boldly said that rates which crossed the 1:8 mark on the parallel market will begin to tumble as liquidity and market confidence improves on the interbank market.
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.