Harare - Government has reviewed the 2022 gross domestic product (GDP) growth downwards to 4.6% owing to high inflation, the impact of the external global environment and the country's own challenges.
The downward review is from an earlier GDP growth forecast of 5.5.
In his 2022 mid-term budget review, the Minister of Finance and Economic Development, Mthuli Ncube said, the domestic economy has not been insulated from the global developments, particularly from rising commodities and inflation as well as disruption of supply chains.
“As a result, domestic economic growth for the year 2022 has been revised downwards from the 5.5% initially projected to 4.6%, reflecting the impact of the external global environment as well as our own unique circumstances,” Ncube said.
He highlighted that growth has been weighed down by reduced output from the 2021/2022 Agriculture season, while other productive sectors are still projected to register positive growth.
Ncube further noted that the depreciation of the local currency and rising inflation remain a challenge that the government has committed to tackling going forward.
Zimbabwe’s local currency has continued on a free fall against the US$ on both the formal and parallel markets.
As of this week, on the auction market, the Zimbabwe dollar is trading at ZW$416.28 against US$1 while on the parallel market it is trading at a range of ZW$850 to ZW$900 against US$1.
The country has been experiencing a rise in inflation since the year commenced with it spiking from 60.7% in January 2022 to 191.6% in June 2022.
The rise in inflation has been mainly attributed to external factors, including the impact of the Russia, Ukraine war.
However, economists and experts have been arguing that the major drivers of inflation in Zimbabwe are internal factors which include the government's inconsistent policies and the depreciation of the local currency.
Meanwhile, Mthuli further highlighted that notwithstanding the global and domestic shocks, the country continues to record positive growth, increase in foreign currency receipts, near balanced budget as well as increasing capacity utilisation of the manufacturing sector.
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