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Zim Economy to decline –World Bank

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The World Bank has projected that Zimbabwe economy will decline by 0.5% in 2018.

According to statistics produced by the World Bank, Zimbabwe’s growth rate will decline from 2.3% in 2017 to 1.8% in 2018.

This is largely due to the under-performing economy which has seen industries shutting down in the wake of unavailability of commodities and the current cash crisis.

 

Although the country’s economy is expected to dwindle, growth in Sub-Saharan Africa is recovering, supported by modestly rising commodity prices, strengthening external demand, and the end of drought in a number of countries.

“Per capita output is projected to shrink by 0.1 percent in 2017 and to increase to a modest 0.7 percent growth pace over 2018-19. At those rates, growth will be insufficient to achieve poverty reduction goals in the region, particularly if constraints to more vigorous growth persist,” the World Bank said on Monday.

In Angola and Nigeria, tight foreign exchange liquidity conditions, reflecting distortions in the foreign exchange market, constrain activity in the non-oil sector.

In South Africa, political uncertainty and low business confidence are weighing on investment.

“In contrast to oil and metals prices, cocoa prices have plummeted, reducing exports and fiscal revenues in Côte d’Ivoire, Ghana, and other cocoa producers. The drought in East Africa has continued into 2017, adversely affecting economic activity in Kenya, and contributing to famine in Somalia and South Sudan,” the World Bank further said.

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Regional inflation is gradually decelerating from a high level, although it remains elevated in Angola, Nigeria, and Mozambique. Inflationary pressures increased in East Africa, due to drought.

Growth in South Africa is projected to rise to 0.6 percent in 2017 and accelerate to 1.1 percent in 2018. A rebound in net exports is forecast to only partially offset weaker-than-previously-forecast growth of private consumption and investment, as borrowing costs rise after the country’s sovereign-debt ratings downgrade.

Nigeria is forecast to go from recession to a 1.2 percent growth rate in 2017, gaining speed to 2.4 percent in 2018, helped by a rebound in oil production, as security in oil producing regions improves, and by an increase in fiscal spending. Growth is forecast to jump to 6.1 percent in Ghana in 2017 and 7.8 percent in 2018 as increased oil and gas production boosts exports and domestic electricity production.

Growth in non-resource intensive countries is anticipated to remain solid, supported by infrastructure investment, resilient services sectors, and the recovery of agricultural production.

Ethiopia is forecast to expand by 8.3 percent in 2017, Tanzania by 7.2 percent, Côte d’Ivoire by 6.8 percent, and Senegal by 6.7 percent, all helped by public investment. However, some countries need to contain debt accumulation and rebuild policy buffers.

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