Zimbabwe’s economic growth in 2024 is expected to decline to 3.5 percent, compared to 4.5 percent in 2023, according to a report by the World Bank.
The fourth World Bank Zimbabwe Economic Update (ZEU), launched on Wednesday, said that though the country’s economic outlook appeared “moderate”, it reflected continued global headwinds, structural bottlenecks, weather-related shocks, and price and exchange rate volatility.
The World Bank said that one of the factors behind the growth decline is a reduction in agricultural output due to depressed global growth and predicted erratic and below-average rainfall. The Zimbabwe Meteorological Services already warned that the ongoing drought being experienced is expected to continue into 2024.
“The ZEU finds that while Zimbabwe’s economic outlook appears moderate, it reflects continued global headwinds, structural bottlenecks, weather-related shocks, and price and exchange rate volatility,” the World Bank said.
“Prolonged global turmoil could result in a slowdown in global output, reduced trade and investment, increased volatility in commodity prices, and supply disruptions.”
“Climate change shocks may also lower economic output, particularly in the agriculture sector.”
Power shortages are also expected to contribute to the economic growth decline as Zimbabwe’s electricity sector still faces major challenges.
“The report estimates that power shortages cost the country a total of 6.1 percent of GDP per year, comprising 2.3 percent of GDP in generation inefficiencies and excessive network losses, and 3.8 percent of GDP on the downstream costs of unreliable energy.”
Zimbabwe’s persistent power crisis has negatively affected the country’s mining sector and many small- and medium-sized businesses, in addition to disrupting the lives of thousands of households.
The World Bank added that continued economic reforms, including fiscal adjustment and rebuilding foreign exchange reserves, will be vital in helping Zimbabwe mitigate the risks of potential economic downturns.
“To sustain economic growth, Zimbabwe must continue tackling its macroeconomic challenges. Addressing price and exchange rate volatility and public debt arrears will support economic growth and job creation. This will help the country address the poverty, vulnerability, and food insecurity rates, which remain high,” World Bank Country Manager Eneida Fernandes said.
(Story compiled with assistance from wire reports)
