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(TALKZIMBABWE) Zimbabwe economy exposed to shocks: World Bank

Zimbabwe economy exposed to shocks: World Bank
Posted by By Floyd Nkomo at 6 February, at 21 : 55 PM

THE economic outlook for Zimbabwe for the 2012 period, despite beings favourable, has significant risks that will expose it to local and exogenous shocks, the World Bank (WB) has said. These shocks include commodity price declines, instability in the banking system, reversals of capital inflows, and political instability, among other issues.

WB country economist for Zimbabwe, Nadia Pifferetti, told an economic outlook symposium that growth in 2012 will be driven by the presence or absence of long-term drivers of sustainable growth.

“Zimbabwe’s favourable evolution in 2011 continued to be supported by exogenous factors, including higher gold, platinum, tobacco and cotton prices and favourable weather conditions supporting recovering agricultural output,” Pifferetti said.

“However, the external position remains precarious, with a current account deficit of 23,4% of GDP (Gross Domestic Product).” She said gross official reserves, including International Monetary Fund Special Drawing Rights allocation, were at US$197 million as at December 2011, representing 0,3 months of imports yet the minimum figure should be three months.

Zimbabwe forecasts an economic growth rate of 9.4% and hopes to retain an inflation figure below 5% this year, according to the Ministry of Finance figures.

Zimbabwe managed to arrest the hyperinflationary environment of the 2006-2008 period by liberalising the economy and introducing a multi-currency regime in 2009, after the controversial harmonised elections of 2008.

The Zimbabwe economy subsequently registered remarkable progress from 2010.

The Consumer Price Index remained stable for the third year in a row.

The WB urged the government to support recovery through fiscal discipline and focussing on rebuilding basic services and public goods as well as removing obstacles to foreign direct investment flows.

Labels: World Bank, ZIMBABWE

posted by MrK @ 1:13 PM