fbpx

Zimbabwe Downsizes Its Growth Predictions

Zimbabwe Downsizes Its Growth Predictions

From Business Day

Zimbabwe has cut its growth forecast for this year to 3.1 percent from 6.1 percent, in line with projections from the International Monetary Fund.

That’s what the finance minister and central bank governor said in a letter to the fund.

The government said the lower growth projection reflected low investor confidence, a liquidity crunch and soft international commodity prices. “A baseline projection for real gross domestic product growth for 2014 is 3.1 percent,” Finance Minister Patrick Chinamasa and central bank governor John Mangudya said in the letter dated July 1. Mangudya confirmed the letter’s content.

Chinamasa and Mangudya were giving an update on the IMF monitoring program that could help Zimbabwe clear billions in external debt.

The letter said that the Zimbabwean government would raise customs duties on selected goods and tighten tax collection to meet a revenue target of $4.12-billion.

“Given the downward revision to the economic outlook, there are significant risks to the revenue side of the budget,” they said in the letter.

News of the sharply lower projection came just days after Chinamasa told parliament that economic growth would not be as slow as that predicted by international lenders, such as the IMF.

The monetary fund has forecast growth of 3.1 percent.

 

Read more at Business Day