Zimbabwe growth to drop by half in 2022: IMF

Zimbabwe's economy has been on a downturn for nearly two decades.

Zimbabwe growth to drop by half in 2022: IMF
FILE: Zimbabwean flag. Picture: Thomas Holder/EWN

HARARE - Zimbabwe's economic growth is projected to slump to around half of last year's levels due to growing fiscal instability and a drop in agricultural output, the International Monetary Fund (IMF) said Monday.

"After rising to about seven percent in 2021, real GDP growth is expected to decline to about three-and-half percent in 2022" as erratic rains and rising macroeconomic instability hamper agriculture, Dhaneshwar Ghura, head of a visiting IMF team, said in a statement.

Zimbabwe's economy has been on a downturn for nearly two decades.

New price and exchange rate depreciation pressures have resurfaced.

Inflation soared to 285% in August, said the IMF, up from 60% at the beginning of the year.

"Uncertainty remains high, however, and the outlook will depend on the evolution of external shocks, the policy stance, and implementation of inclusive growth-friendly policies," Ghura said following a visit to the capital Harare.

The IMF offers technical support to Zimbabwe, but is precluded from providing financial aid to the country "due to unsustainable debt and official external arrears", he said.

Any financial deal would require the clearance of external debt arrears, macroeconomic stability, poverty reduction and transparency reforms.