Zimbabwe expected a strong economic growth of 7.4 percent this year despite the COVID-19 impact, Central bank governor John Mangudya said on Thursday.
“The measured optimism is based on the expected significant growth of the agricultural output in 2021, as a result of the good rainy season, fiscal sustainability, and the Bank’s focus on price and financial system stability,” Mangudya said in his 2021 monetary policy statement.
This would be a rebound from a decline of 4.1 percent registered in 2020.
“Notwithstanding these COVID-19-related challenges, the Bank remains optimistic that the expected economic growth of 7.4 percent in 2021 is achievable,” said the Reserve Bank of Zimbabwe governor.
According to Mangudya, improved production and productivity will be key to sustaining the growth rate of 7.4 percent in 2021 and above 5 percent thereafter.
The central bank was optimistic that the current global economic uncertainties will dissipate as countries roll out their COVID-19 vaccination campaigns, said Mangudya.
Zimbabwe started vaccination on Thursday, days after receiving its first consignment of vaccines China donated. The southern African country has so far recorded 35,423 positive cases and 1,418 deaths.
The central bank also projected the annual inflation to be lower than 10 percent this year, from 362.63 percent recorded in January.
“This inflation path will be underpinned by a targeted month-on-month inflation rate of below 3 percent,” said the central bank governor.
Coupled with increased food production due to a favorable agriculture season, Zimbabwe’s inflationary pressure was expected to remain subdued in the short to medium term, according to Mangudya.