Zimbabwe is unlikely to achieve its projected economic growth rate of 2,7 percent next year in the face of falling commodity prices and an impending drought , analysts have said.
Growth in mining and agriculture are expected to anchor the southern African country’s economic growth next year, although revenue is expected at $3,85 billion from $3,69 billion this year according to finance minister Patrick Chinamasa’s projections in the 2016 budget projections.
Speaking at a parliamentary post-budget seminar on Tuesday labour economist Godfrey Kanyenze said expecting the economy to grow in the context of declining commodity prices and a possible drought was too ambitious.
“We may actually struggle to do better than this year. It may actually be heroic to assume that we will grow at 2.7 percent given that the conditions are actually deteriorating,” he said.
“You cannot expect to reap the in same season that you sow. Structural reforms will take much longer and we may not be able to realise all the benefits in 2016.”
This year, government revised the economic growth projections from an initial 3,2 percent to 1,5 percent following a poor agricultural season. Revenue projections were cut down to $3,69 billion from $3,9 billion as key sectors floundered.
Revenues from tobacco – a top earner of foreign currency in previous years – this season fell 14 percent to $586,4 million. Tobacco output is expected to drop by as much as 20 percent after fewer farmers registered to grow the crop next year coupled with another expected poor rainy season.
Mineral earnings for the nine months to September — excluding diamond revenue — fell 11 percent to $1,26 billion owing to a decline in commodity prices.
“It is quite disturbing that they are expecting growth from agriculture and mining,” said economist John Robertson.
“Of concern really should be government’s expenditure and them putting in place investment friendly measures. With the current restrictions, investing in Zimbabwe is a privilege that one has to pay for.”
The country’s growth prospects hinge on government clearing arrears to international lenders by the first quarter next year to unlock fresh funding for the stuttering economy, analysts said.-Source
One Reply to “Chinamasa’s GDP Growth Is Fake – Analysts”
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The minister of $4billion is just that man who should be ashamed of being called a minister at all. $4 billion to a nation of zimbabwe’s population and economic interests is petty cash, or float. To illustrate a bit, growth rate is roughly linked to economic growth in a way like capital relates to profit or turn over.in theory it would be possible for $4billion to earn even 10 % growth BUT all conditions should exist.but for Zimbabwe that just can’t happen. You need rain to drive agriculture. You need industry and electricity to drive production. You need your own currency to drive confidence and be able to dictate cash flow. You need real politicians to manage realistic policy. Politicians who choke the economy by appointing their fatherless nephews to government can not drive economic growth. Politicians whose wives usurp power control and abuse positions, while obtaining degrees by presidential decree can not run economies and be useful. I could go on, including that the minister himself must know what he is talking about. Chinamasa is a lawyer and was not a good one at that. A below average lawyer expected to rescue an economy ruined by someone with 7 degrees in destruction and violence, is just a dream, a dream my countrymen.