STOCK broking firm Morgan & Co says Zimbabwe’s gross domestic product (GDP) will grow by 3.2% this year, slightly below the 4.6% projected by the government, as the country battles to forestall setbacks stemming from power shortages and Ukraine-Russian war.
GDP growth has also been held back by exchange rate volatilities, along with a relentless inflationary charge. Annual inflation rate shot up to 257% last month, up from 191% in June, while the local currency is trading at around ZW$850 against the greenback.
In its latest report titled “Economics and Equity strategy note: The Zimbabwe Syndrome”, the brokerage firm said the country’s economic outlook remains highly uncertain.
“Morgan & Co research projects a modest 2022 GDP growth of 3.2% in 2022 and 4.0% in 2023 given that the country is not insulated from geo-political headwinds and is also facing several regional and country-specific constraints such as power shortages,” the stock broking firm said.
More recently, the World Bank trimmed Zimbabwe’s growth forecast to 3.7% from 4.3% on the back of the impact of Russian’s invasion of Ukraine and the Covid-19 pandemic. The Bretton Woods institution also expects growth to marginally slowdown in 2023 to 3.6%.
On the other hand, the ministry of Finance and Economic Development has revised its GDP growth forecast for Zimbabwe downwards from 5.5% to 4.6% because of the impact of external global risks such as the Russian-Ukraine crisis.
In addition, growth has been weighed down by reduced output from the 2021/22 agricultural season. However, the government expects the economy to continue on a growth trajectory and register 5% in 2023.
This growth is expected to be driven by favourable international commodity prices, stable macroeconomic environment, and improved production in all sectors of the economy.
Morgan & Co said economic recovery in Sub-Saharan Africa (SSA) was expected to slow down to 3.8% during 2022, before accelerating to 4% during 2023.
The region’s recovery will be supported by elevated commodity prices, gradual recovery in tourism, with vaccinations in some tourism-reliant economies already proceeding at a much faster pace than in the rest of the region.
On the other hand, the Southern African Development Community’s real GDP growth is projected to decelerate to 3.1% in 2022 from a recovery of 4.4% experienced in 2021.
South Africa, an economic powerhouse in the region, is projected to grow by 1.9% and 1.4% in 2022 and 2023, lifted by growth in trade, tourism, mining and manufacturing, although electricity supply constraints and underperforming state-owned sub-Saharan Africa economies GDP growth.