IN September, Fitch Solutions revised downwards its forecast for Zimbabwean credit growth to 200 percent in 2023, from 220 percent previously, reflecting the slight strengthening of the Zim dollar following its May-June sell-off. The think tank then believed that credit growth would slow to 37 percent year-on-year at the end of 2024. Our staff writer, Almot Maqolo (AM), caught up with Jane Morley (JM), head of sub-Saharan African Risk-Fitch Solutions, for more insights on the researcher’s views of the overall structural backdrop of the country’s economy. Below are excerpts from the interview:
AM: What is the current state of Zimbabwe’s economy and what are the key macroeconomic indicators that highlight its performance?
JM: A sharp sell-off of the Zimdollar caused inflation to return to triple digits over June-July 2023, which will have eroded household purchasing power in the second half of 2023. Meanwhile, power blackouts of up to 19 hours a day and flooding disrupted the export-oriented mining sector in the first half of 2023. That said, strong agricultural production has bolstered the incomes of farmers (62 percent of the workforce), while in March the government approved a 100 percent hike in public wages as well as increases in various US dollar monthly allowances for public-sector workers. Overall, government spending has been rising due to political pressures stemming from the August 2023 election, and we expect that this, as well as buoyant private consumption, will see real gross domestic product growth accelerate from an estimated 3,4 percent in 2022 to 3,8 percent in 2023. However, we see growth easing to 3,3 percent in 2024 as drought erodes farmers’ incomes, government consumption moderates (in the wake of the Q3 23 elections) and investment tails off following the completion of major projects i
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