It is no secret that the Zimbabwean economy is struggling at the moment. In fact, that is putting it mildly, the economy is in the toilet is a more apt description. Now, it seems even our optimistic Finance Minister admits it. He has even put a number to it all.
According to the Pre-Budgetary Statement the Finance Minister has made the following predictions:
- The economy will shrink by 6.5%, for whatever reason he says the economy will grow by 4.5% in 2020
- The shrinkage will be mostly a result of a contraction in Agricultural output which he put at 16.3%. The drought has really hit the country hard and that is understandable
- Another cause of the shrinkage will be due to a fall in mining output with negative growth of 12.3%. Now, this is puzzling, it’s not like drought has that much of an impact on mining. With all that illegal artisanal mining that is destroying the environment and the machete-wielding gangs you would be forgiven for thinking we were getting something for our troubles. Turns out we are not.
- Power and energy will see negative growth of 19.8% this year and will only see modest growth of 8.7% in 2020. It means even the Finance Minister does not think load shedding will be a thing of the past by then.
- In fact, all sectors of the economy will see contraction this year. We mean all.
2020 Will be a good year we are told
2020 will be a great year and the economy will grow because:
- Improved rainfall season which should enhance agriculture
- production and electricity generation with trickle-down effects to
- all other sectors;
- Recovery in aggregate demand;
- Improved foreign currency availability; and
- Improved macro-fiscal stability and business confidence.