This archive report was first published on 9 July 2020.
Published on July 9, 2020, the African Development Bank (AfDB) has issued a grim economic forecast for Zimbabwe, projecting a 7.5% economic shrinkage if the pandemic subsides by July, and a 8.5% contraction if it continues through to December 2020.
The bank's revised projections come after earlier predictions of 4.6% economic growth in 2020 and 5.6% in 2021. AfDB attributes the expected decline in production to the COVID-19 pandemic and associated policy actions taken to limit infections.
According to AfDB, Zimbabwe's fiscal deficit is expected to remain above 5% due to tax relief measures and weak business activity, exacerbating foreign exchange shortages in the country.
The bank also projects a deterioration in the trade balance and secondary income account, pushing the current account to a deficit of 2% of GDP in 2020, which could widen further to 2.7% and wipe out the 2019 surplus of 1.1%.
AfDB projects Africa's GDP will contract by 3.4% in 2020, with cumulative GDP losses ranging between $173.1 billion and $236.7 billion in 2020-2021. For 2021, the bank estimates GDP losses could be between $27.6 billion and $47 billion from the potential GDP of $2.76 trillion without the pandemic.
