The Zimbabwean consumer will continue to face a difficult environment in the coming quartersas low disposable incomes and high unemployment will weigh on household spending. Wider economicgrowth in the country will be insufficient to boost consumer confidence, though it will help to carry throughincremental expansion in spending.
Zimbabwe's real GDP growth will return to positive territory in 2017, after a recession in 2016 drivenprimarily by a drought which severely impacted the agriculture sector. Growth will reach 0.6% in 2017according to our forecasts, compared to a decline of 1.8% in 2016, accelerating through the remainder ofour forecast period to a peak of 2.5% in 2021. Parallel to this growth, we anticipate an increase in consumerspending; however, this uptick will only be moderate, reflecting the continuing difficulties faced by theZimbabwean economy, and the limited potential in the consumer market over the short-to-medium term.
That said, positive economic signs are starting to appear in the country. In 2017, the government introduceda bond note programme which has contributed to a much-needed improvement in liquidity in the country. Ifthe success of this initiative continues and is combined with other economic manoeuvres, it could provideupside to the economy and to consumer confidence over the coming years.