Zimbabwe’s Finance Minister Forecasts Strong Growth in 2021

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Zimbabwe's Finance Minister Mthuli Ncube arrives to present 2021 National Budget to the parliament in Harare, Zimbabwe, November 26, 2020. REUTERS/Philimon Bulawayo

Zimbabwe Finance Minister forecasts strong growth of 7.8% in 2021

07/29/2021 | 09:55am EDT

HARARE (Reuters) – Zimbabwe’s economy is now expected to grow by 7.8% in 2021 from an initial forecast of 7.4%, driven by moderating inflation, higher commodity prices and better agriculture harvest, Finance Minister Mthuli Ncube said on Thursday.

After two years of recession due to drought and effects of the COVID-19 pandemic, Zimbabwe is expected to record its highest maize output since 1984 while a rally in global commodity prices is seen easing foreign currency shortages.

The southern African country has battled bouts of hyperinflation and currency collapse in the past two decades, but year-on-year inflation is now at its lowest since March 2019 and Nucbe said the rate was seen slowing further to between 22% and 35% by the end of this year.

Workers’ unions, however, say although inflation is moderating, salaries still lag behind and are demanding monthly pay equivalent to $500, more than double the average wage.

The World Bank, which expects lower growth, estimates that nearly half the 15 million population live in extreme poverty.

Analysts say the recovery will remain fragile without outside support.

Ncube said Zimbabwe’s external debt stood at $10.5 billion as of December 2020 and the country would start clearing some arrears this year but did not give details.

He expected diaspora remittances to increase to $1.3 billion this year from $1 billion in 2020.

(Reporting by MacDonald Dzirutwe; Editing by Promit Mukherjee and Emelia Sithole-Matarise)

© Reuters 2021

Source: Market Screener

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