Herald Reporter
ZIMBABWE’s Gross Domestic Product (GDP) is set to reach US$66 billion this year, 88 percent higher than the previously forecast US$35 billion, a survey by renowned financial analysts, World Economics, shows.
The World Economics’ GDP database provides a radically different view of economic activity in over 155 countries of considerable relevance and utility to investors of all kinds, and to Governments wanting to lower borrowing costs.
GDP is a measure of all the activity of companies, governments and individuals in a country and when an economy is growing, each quarterly GDP figure is slightly bigger than the previous three-month period.
In its survey, World Economics said an analysis of the International Monetary Fund’s growth statistics showed that Zimbabwe’s economy is growing more than the earlier anticipated figures.
“The official estimate for Zimbabwe’s GDP was US$35 billion at the end of 2022 in purchasing power parity terms.
“World Economics has developed a database presenting GDP in Purchasing Power Parity terms with added estimates for the size of the informal economy and adjustments for out-of-date GDP base year data.
“World Economics estimates Zimbabwe’s GDP to be $66 billion — 88 percent larger than official estimates.
“2023 data is based on IMF growth rate estimates applied to World Economics GDP data,” it said.
Economist and former Reserve Bank of Zimbabwe Monetary Policy Committee member Mr Eddie Cross told The Herald last night that the projected growth figures were indicative of Zimbabwe’s current economic growth trajectory led by President Mnangagwa.
Mr Cross added that there “is no doubt” that the country’s economy, which had a GDP of US$17 billion in 2017, is growing.
“The only explanation that can be given to that is that they are taking into account the informal sector so that is probably a reasonable indication of the real GDP of the country. I think it might have even been a bit conservative. It’s a bit like when the IMF did a review of the Nigerian economy and doubled the GDP.
“There is no doubt that our economy is growing fast. This informal sector has been with us for a long time, most people say we are the most informalised country in the world so our unrecorded GDP is very big,” he said.
Last month, Vice President Constantino Chiwenga revealed that Zimbabwe’s GDP currently stood at US$40 billion, owing to sound economic policies instituted by President Mnangagwa.
The US$40 billion figure was not taking into consideration the informal sector as was done by World Economics.
“Despite the sanctions, in the past five years, we realised growth that has seen our Gross Domestic Product surge from around US$20 billion in 2018 to over US$40 billion this year. Our growth potential, however, is far greater than what we are managing now, all because of the degrading effect of the heinous sanctions,” VP Chiwenga said.
The IMF had earlier projected Zimbabwe’s economy to grow by 4,8 percent during its mission to Zimbabwe led by Mr Wojciech Maliszewski.
“Real GDP is projected to grow by around 4,8 percent in 2023, supported by strong activity in the mining sector and — reflecting the beneficial impact of structural reforms — in agriculture and energy sectors,” said Mr Maliszewski.