Zimbabwe’s economy grew by 0.7% in 2016 despite the combined effects of El Nino drought and domestic financial turmoil, a World Bank senior economist has said.
By Jeoffrey Ncube
Addressing the media at the launch of the Zimbabwe Economic Update (ZEU) in Harare on Wednesday, a Senior Economist at the World Bank, Johannes Herderschee said drought reduced agricultural output leading to an increase in food prices towards the end of 2016.
“The drought reduced agricultural output to increased food prices towards the end of the year despite the government’s efforts to boost production and stabilize prices.
“The public provision of agricultural inputs, the creation of food for work programs, and the establishment of price supports for staple foods accentuated the government’s expansionary fiscal-policy stance,” he said.
Herderschee added that gorvenment also increased spending on a cash basis while clearing domestic arrears.
“Meanwhile, the government also increased spending on a cash basis to clear domestic arrears; the authorities financed much of the widening fiscal deficit by issuing treasury bills purchased by commercial banks and a US$ 1 billion overdraft with the RBZ,” said Herderschee.
In his remarks, Finance Minister, Patrick Chinamasa expressed satisfaction at the World Bank Economic Update.
“I am very happy that the update appreciates the measures and reforms that we have been making to respond to the challenges we are facing in particular the 2015 and 2016 drought.
“We did rise to the challenge we supported our people in terms of food, drilling boreholes and also a lot of measures that we took,” he said.
Chinamasa said government is in the process of compiling a matrix of reforms they have taken for the past years.
“We are in the process of compiling a matrix of reforms that we took for the past years and the stages in terms of implementation, so that the public is aware of the efforts that we are making, said Chinamasa.
