Slowing economic growth hits industry -Newsday Zimbabwe
ZIMBABWE industry has been forced to re-strategize and produce competitive products to survive the economic headwinds.
The Ministry of Finance pegged Zimbabwe’s economic growth forecast at 5.5% in November last year before cutting it to 4.6% in July this year. Last month, he said economic growth would be less than 4.6%.
Last week, the World Bank further reduced the country’s economic growth projection from 3.5% to 3%.
Market analysts Tatenda Andrew Mabhande said the downward projection will hurt businesses.
“The recent downward revision of Zimbabwe’s economic growth estimates by the World Bank speaks to both exogenous and endogenous risks that still exist in the economy. While downside risks such as power, cash and foreign exchange shortages, coupled with restrained consumer spending, continue to outweigh the upside, business performance in Zimbabwe will remain subdued,” Mabhande said. .
The Chief Executive of the Zimbabwe National Chamber of Commerce, Christopher Mugaga, said: “The economic growth we have seen has been at the macro level, whether it is 4% or 5%, and that has not happened. translates to nothing at the micro level. What I am saying is that there has been no change in terms of job creation or purchasing power.
Urging the country to review its strategy and end its heavy reliance on imports, he said: “At 3% or 4% growth, it just doesn’t make sense, we need ‘at least 7% for double-digit growth for that to make sense.’
Economist Prosper Chitambara said every time agriculture sneezes, manufacturing catches a cold.
“For this year, agriculture has not performed very well with production well below initial forecasts. This then affected the rest of the economy. Agriculture remains one of the mainstays of the economy and any reduction in agricultural production obviously affects overall economic growth,” Chitambara said.
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