Zimbabwe’s economy to grow 4.1% this year and 4.2% in 2023 according to the 2022 World Economic Situation and Prospects (WESP) report, produced by the UN Department of Economic and Social Affairs (DESA).
UN’s 2022 projections are below the 4.3% and 5.5% growth forecast by the World Bank (WB) and the Treasury. It estimates that the southern African nation’s economy grew 6.3% in 2021 but slower than the government’s 7.8% estimate.
The country’s economic rebound is riding on a good 2020/21 agriculture season, higher international mineral commodity prices, a stable macroeconomic environment that facilitated domestication of some value chains and better management of the Covid-19 pandemic.
Southern Africa GDP growth is poised to be at 2.6% this year and 2.9% in 2023. Tourism-dependent Mauritius leads in terms of GDP growth at 6.7% in 2022 followed by Lesotho at 4.6% while Botswana will see a growth of 4.5% this year.
Malawi, Mozambique and Namibia this year’s GDP growth seen at 4.0%, 3.8% and 2.9% respectively. In the same vein, Eswatini, Angola and Zambia economies are poised to grow by 2.7%, 2.4% and 0.9% in 2022.
South Africa’s economy grew by an estimated 3.8% in 2021, not enough to compensate for the 7% drop in 2020. Growth is forecast at only 2.3% in 2022.
African central banks are mostly maintaining accommodative monetary policy stances but the UN noted that this might change in the short term.
In 2021, only a small number of countries changed policy interest rates, either through cuts as in Ghana, Liberia, the Republic of Congo, Seychelles and Uganda or hikes in Angola, Ghana, Lesotho, Mozambique, South Africa, Zambia and Zimbabwe.
“Leniency in developed countries towards rising inflation has allowed crucial policy space for African central banks to prioritise economic growth and narrow output gaps, even if that meant tolerating rising inflationary pressures,” UN said.
“Upside risks to inflation from currency depreciation and planned consumer tax hikes as well as reduced subsidies due to fiscal consolidation may require central bankers to raise interest rates sooner rather than later.”
The report revealed that the fading monetary stimulus along with fiscal consolidation would complicate already challenging recoveries.
Economic activity in Africa continues recovering from the unprecedented events of 2020 but at a fragile pace.
“Aggregate output in Africa is projected to recover gradually against a backdrop of subdued investment and high uncertainty,” reads the report.
Africa’s economic growth is estimated to firm up in 2022, to 4% from 3.8% in 2021 – Harare