Mthuli Revises Zimbabwe’s Economic Growth Projection
Finance, Economic Development and Investment Promotion Minister Mthuli Ncube has revised Zimbabwe’s projected economic growth for the year from the earlier forecast of 3.5% to 2%.
This downward adjustment is due to the devastating impact of the El Niño-induced drought.
In his Mid-Term Budget Review Statement presented to parliament on Thursday, Minister Ncube explained that the projected increase in winter wheat production during the current season will help mitigate the contraction in the agriculture sector. He said:
The domestic economy is now projected to grow by 2% in 2024, down from the 2024 National Budget projection of 3.5%.
This downward revision is mainly attributed to the more severe than expected impact of the El-Nino induced drought on agriculture output.
The growth projection is, however, subject to upside potential as wheat output during this winter season could be higher than projected.
This would reduce the contraction of the agriculture sector and ultimately improve the overall GDP outcome for this year.
Ncube also said the introduction of a new gold-backed national currency, the ZiG, on 05 April this year stabilised prices in the economy. Said Ncube:
Government undertook currency reforms culminating in the introduction of the Zimbabwe Gold (ZiG) replacing the Zimbabwe dollar on 5th April, 2024.
In that regard, the ZiG month-on-month inflation remained stable at 0% in June from -2.4% in May 2024, while the US$ month-on-month inflation stood at -0.3%, from 0.1% in May 2024.
In the outlook period, inflationary pressures are expected to remain subdued due to the tight monetary and fiscal policies being pursued by the authorities aided by the dissipating negative inflation expectations as the local currency unit remains stable against major currencies.
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