Zimbabwe’s economy shrunk by 7.5% in 2019 but could rebound by 2.7% in 2020, according to a new World Bank report.
This was the first time that Zimbabwe suffered a GDP contraction since 2008, when the economy fell 16.5% at the peak of the hyperinflation crisis.
In its Global Economic Prospects for 2020, released Wednesday, the World Bank says weak commodity prices slowed economic growth in many African countries in 2019.
“In others, agricultural production suffered from severe drought (Senegal, Zimbabwe), or late rains (Kenya). Zimbabwe also suffered a sharp rise in inflation that continued to squeeze real incomes, resulting in a large contraction in economic activity, estimated at 7.5 percent. Activity has been further constrained by persistent shortages of food, fuel, electricity, and foreign exchange,” the World Bank says.
Growth is estimated only at 2.7% in 2020, and 2.5% in 2021.
The IMF last year estimated negative economic growth of 7.1% in 2019, and a modest recovery of 2.5% in 2020.
Finance Minister Mthuli Ncube’s own forecasts are of a decline of 6.5% in 2019 and recovery of 3% in 2020.
That recovery was already doubtful given rising inflation and forex shortages. It now looks even more unlikely due the drought, estimated by SADC weather experts to be the worst in 40 years. The poor rains have left at least 7.5 million Zimbabweans in need of urgent food aid, according to aid agencies.
The World Food Programme said in December that it fears that the country could run out of grain by February.
In the region, South Africa saw sluggish growth of 0.4% in 2019. This will continue in 2020 with the economy expected to grow 0.9%. Zambia grew 1.8% in 2019 and could grow 2.6% in 2020.
Tanzania is forecast to grow 5.8% this year.