The International Monetary Fund (IMF) on Wednesday lowered Zimbabwe’s growth forecast for this year to 1.5 percent from 2.8 percent, blaming drought and lower commodity exports.
Domenico Fanizza, who is leading an IMF mission that is reviewing Zimbabwe’s progress, said a drought this year had caused a significant slowdown in economic activity.
He told reporters at a news conference that the lower growth forecast of 1.5 percent was still a “cautious assumption.”
“Moreover, the international environment is becoming increasingly difficult, with low prices for Zimbabwean commodity exports, and those are the main reasons for the revision downwards for the projections for 2015,” Fanizza said.
The southern African nation has been struggling for five years to recover from a catastrophic recession that was marked by billion per cent hyperinflation and widespread food shortages.
Some analysts say Zimbabwe could head into a downturn this year.
The new forecast matches that of the government, which more than halved its initial 3.2 percent projection in July, citing the drought and low commodity prices.
More than half of Zimbabwe’s exports come from the mining sector, while tobacco sales — the southern African country’s single largest export earner – could this year be hurt by the slowdown in China, their major market.
Fanizza said the IMF staff programme was meant to repair strained relations between Zimbabwe and international lenders and could eventually open the door for new funding. Reuters/NAN
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