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Analysis by Region - Emerging Markets - Zimbabwe

Publisher Oxford Economics
Published Feb 21, 2025
Length 6 Pages
SKU # OFE19846948

Description

Zimbabwe’s economy is expected to accelerate this year after the marked slowdown in 2024. Our economic growth forecast of 2.8% this year is below consensus, as we think last year's drought will continue to stifle electricity generation. Meanwhile, the ZiG has stabilised somewhat after last year’s 43% devaluation. In a recent policy statement, the Reserve Bank of Zimbabwe (RBZ) noted that elevated interest rates and increased foreign exchange reserves have contributed to this stability. Foreign exchange reserves have almost doubled since the introduction of the ZiG. To further support reserve accumulation, the RBZ reduced the foreign currency earnings that exporters can retain by 5 ppts to 70%. However, increased reserve accumulation is from a low base and insufficient to support the currency.

Table of Contents

6 Pages
Zimbabwe: Currency fragile despite government's optimism
Forecast overview
Recent developments
Short-term outlook
Key drivers of our short-term forecast
Economic risk
Economic risk evaluation
Background
Economic development
Structure of the economy
Balance of payments
Policy and politics
How Do Licenses Work?
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