IMF forecasts solid growth for Zimbabwe economy

HARARE: The International Monetary Fund forecasts Zimbabwe's economy will grow by six percent this year, nearly double its previous estimate, after weathering effects of the Covid-19 pandemic, the IMF said.

The Fund's optimistic forecast was released after Zimbabwe Finance Minister Mthuli Ncube aimed for punchy 7.8-percent growth following years of contraction.

The coronavirus pandemic hit just as Zimbabwe's economy had contracted by six percent in 2019, partly due to monster cyclone Idai and a devastating drought.

In 2020, the country's gross domestic product declined by a further four percent.

"However, an economic recovery is underway in 2021, with real GDP expected to grow by about six percent," the IMF said in a statement late Wednesday following a two-week virtual visit.

It said growth would be buoyed by a "bumper agricultural" harvest, increased energy production and a pick up in manufacturing and construction activities.

"Zimbabwe has shown resilience in the face of the Covid-19 pandemic and other exogenous shocks," an IMF statement said.

It added that the southern African country had cleared outstanding arrears to the fund in late 2016.

The Fund nonetheless called for more efforts to cement the trends and quicken reforms, such as improving the business climate and foreign exchange and monetary policies.

Zimbabwe has been struggling for more than a decade marked by hyperinflation and weak economic activity.

Inflation has finally begun to ease from a staggering rate of around 700 percent last year.