Zimbabwe growth to quicken to 4.8 pct in 2017

HARARE (Capital Markets in Africa) – Zimbabwe expects economic growth to quicken to 4.8 percent in 2017 from 1.2 percent this year on improved agriculture production and higher global commodity prices, the Treasury said in a budget strategy document.

The southern African nation is in the throes of its worst financial crisis since it switched its currency for the U.S. dollar, and its plans to introduce local bank notes next month have helped fuel protests against President Robert Mugabe.

In a document dated October and marked “pre-budget strategy paper for 2017”, the Treasury said the economy had this year shown resilience in the face of liquidity shortages and the worst drought in a quarter century but would rebound next year.

“The 2017 growth projection is anchored on the following assumptions: normal to above normal rainfall pattern, supporting a favourable agricultural season (and) moderate improvement in international commodity prices,” the document said.

Treasury said incentives to exporters would also help lift the economy after the central bank in May announced a five percent bonus for exports, which would be paid in local bank notes called “bond notes”.

But the expected introduction of bond notes early next month has raised fears of a return to a domestic currency abandoned in 2009 as hyperinflation soared out of control.

The Reserve Bank of Zimbabwe Governor John Mangudya was quoted by the state-owned Sunday Mail saying the central bank would embark on a countrywide promotion of the bond notes next week to allay fears of a return to the Zimbabwe dollar.

Treasury said year-on-year inflation would average 1.1 percent in 2017, up from -0.4 percent this year due to an expected rise in energy prices.

Source: Reuters Africa News