Zimbabwe’s Finance and Economic Development Minister, Professor Mthuli Ncube, yesterday presented a sobering outlook for the nation’s economy in his Mid Term Budget Review in Parliament, announcing a revised GDP growth projection of 2% for 2024. This is a significant downgrade from the initial forecast of 3.5% presented in the 2024 national budget.
Professor Ncube attributed the downward revision primarily to the severe impact of the El Nino-induced drought, which has drastically affected the agricultural sector. The agricultural sector is now expected to contract by 21.2%, a stark contrast to earlier projections. However, there is a glimmer of hope as the Minister noted optimistic reports from the Ministry of Agriculture regarding the wheat crop’s performance, which could mitigate the sector’s overall contraction.
“We have reflected every sector of the economy. You can see there that we expect natural and negative growth from the agricultural sector at minus 21.2%,” Professor Ncube explained. “But I’m hearing optimistic numbers from the Ministry of Agriculture again, which is very pleasing on the back of better performance from the wheat crop.”
Despite the agricultural sector’s struggles, other sectors are showing resilience and growth. The accommodation and food sector, along with the ICT and tourism sectors, are expected to perform robustly. “Looking at the other sectors, you can see that the accommodation and food sector will do very well. So will the ICT sector. So, the tourism sector, accommodation and food, and ICT will be strong performers while agriculture is obviously being impacted by the El Nino issue,” the Minister added.
The Minister emphasized that while the current projection is for a 2% growth, there is potential for an improved outcome.
“This downward revision, Madam Speaker, is mainly attributable to the more severe than expected impact of the El Nino-induced drought on agricultural output,” he stated. “The growth projection, however, is subject to upside potential as wheat output during this winter season could be higher than projected. This would reduce the contraction of the agricultural sector and ultimately improve the overall GDP outcome for this year.”
