By ETimes
OMIGZIM on Zim Economy: Baseline view suggest fragile stability
The pre-election picture is hampered by a politically unstable atmosphere and the danger of business blocking policies, the Old Mutual Investment Group Zimbabwe (OMIGZIM) has said.
The general elections in 2023 are the main cause of pessimism because, based on prior general elections in the nation, they may be marred by policy reversals and political violence, which would make the economic environment riskier.
“An increasingly fragile political environment and the associated threat of business inhibiting policy weighs on the pre-election outlook,” OMIGZIM stated.
“This notwithstanding, the overall environment still exhibits a noteworthy sense of endurance. Resultantly, the baseline view suggests a fragile stability, with muted but real downside risks.”
OMIGZIM said the medium- to long-term upside potential of the economy outweighs the short-term downside threats.
“Policy intent to stay the course on a tight monetary policy as well as international re-engagement efforts are encouraging, though their sustainability remains arguably compromised ahead of general elections.
“Green shoots over the near term outlook are primarily hinged on primary output sectors such as agriculture and mining, as well as infrastructure and social services,” it said.
Akribos Research Services estimates real GDP will further pull back to 1.5% in 2023 from 2.0% in 2022.
In contrast, the International Monetary Fund expects Zimbabwe’s GDP to grow by 3.0% in 2022, then decline to 2.8% in 2023, then slightly increase to 3.0% in 2027.
The IMF stated that there is still a lot of uncertainty and that the economic outlook would depend on how important policies are implemented and how external shocks develop.
Also, Fitch Solutions expects Zimbabwe’s GDP growth to accelerate to 2.4% in 2023 from 2.0% in 2022 – Harare