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Revised IMF Projection Anticipates 5.9 Percent GDP Expansion in 2010

  • Gibbs Dube

The lender of last resort said robust domestic demand, foreign currency remittances from Zimbabweans living abroad and a recovery in exports are boosting growth

The International Monetary Fund has upwardly revised its projections for Zimbabwean economic growth this year to 5.9 percent, significantly higher than the 2.2 percent anticipated when it last made a forecast in April.

In its October 2010 World Economic Outlook report, The IMF anticipated real growth - adjusted for consumer inflation - of 4.5 percent growth in 2011, compared with its earlier forecast of flat output.

The lender of last resort said strong economic impulses in Sub-Saharan Africa are helping boost growth in Zimbabwe. Robust domestic demand, foreign currency remittances from Zimbabweans abroad and a recovery in exports are also factors. Asian demand for minerals and other commodities is a further contributing factor, the IMF said.

“Output growth in the region is projected to accelerate to 5 percent in 2010 and 5.5 percent in 2011, supported not only by the recovery in exports and commodity prices, but also by robust domestic demand in a number of economies,” said the report.

Economist James Wade told VOA Studio 7 reporter Gibbs Dube that the IMF’s latest projections are realistic taking into account notable recoveries taking place in Zimbabwean agriculture, mining and tourism.

Meanwhile, consumer inflation picked up in the 12 months through September to 4.2 percent following 3.6 percent for the year through August.

The Zimbabwe National Statistics Agency said prices rose just one tenth of a percent in September, the same as in August. Food, beverage and utility costs were responsible for the 0.1 percent monthly rise.

The rise for the past 12 months was somewhat exaggerated because a decline in prices of one half of one percent witnessed in September 2009 fell out of the calculation of the one-year inflation rate.

Bulawayo-based economist Eric Bloch said imported goods are becoming more costly for Zimbabweans due to a rise in the South African rand against the dollar, boosting prices in dollars, the other main currency in use.

The International Monetary Fund (IMF) has upwardly revised its projections for Zimbabwean economic growth this year to 5.9 percent, significantly higher than the 2.2 percent anticipated when it last made a forecast in April.

The IMF, in its October 2010 World Economic Outlook report, sees real growth - meaning adjusted for consumer inflation - of 4.5 percent growth in 2011.

The lender of last resort said strong economic impulses in Sub-Saharan Africa are helping boost growth in Zimbabwe. But robust domestic demand, foreign currency remittances from the diaspora and a recovery in exports are also factors. Asian demand for minerals and other commodities is a further contributing factor, the IMF said.

“Output growth in the region is projected to accelerate to 5 percent in 2010 and 5.5 percent in 2011, supported not only by the recovery in exports and commodity prices, but also by robust domestic demand in a number of economies,” said the report.

Economist James Wade told VOA Studio 7 reporter Gibbs Dube that the IMF’s latest projections are realistic taking into account notable recoveries taking place in agriculture, mining and tourism.

Meanwhile, along with the good news on growth, some bad news on inflation: the rate at which the cost of living is rising picked up briskly in the 12 months through September to 4.2 percent following 3.6 percent for the year through August.

However, the Zimbabwe National Statistics Agency said prices rose just one tenth of one percent in September, the same as in August. The rise for the past 12 months was because a decline of one half of one percent seen in September 2009 fell out of the calculation of the one-year inflation rate.

Otherwise food, beverage and utility costs were responsible for the 0.1 percent monthly rise.

Economist Eric Bloch said that imported goods are becoming more costly due to a rise in the South African rand against the dollar, boosting dollar-based prices.

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