Zimbabwe: Govt Predicts Economic Shrink Due to COVID-19

29 May 2020

The government says the economy will slump in light of the effects of the COVID-19 which has reduced most economic activities worldwide.

"In tandem with other global economies, Zimbabwe's economy has been negatively impacted by the COVID-19 outbreak and growth is expected to slow down. The drought experienced in the 2018 season and the current season coupled with diminished access to external sources of foreign currency further compounded Zimbabwe's economic situation," Information Minister Monica Mutsvangwa said while addressing a post Cabinet media briefing on Wednesday.

Mutsvangwa, without giving much details, said government had adopted a raft of fiscal and monetary measures to ease the impact of the COVID-19.

"There are however, measures, both fiscal and monetary, that are being implemented to address the challenges that the country is going through in the absence of financial support from international financial institutions," she added.

Zimbabwe's inflation and prices of basic commodities have sky-rocketed since the inception of the lockdown with prices having tripled in the last two months.

Most businesses in the informal sector are closed as the government maintains level two of the lockdown.

The Zimbabwean dollar has significantly lost its value on the market with money changers pouncing on the slump to benefit against the US dollar.

Mutsvangwa blamed this on speculative tendencies by the informal money traders.

"It is also stressed that the current price and foreign exchange rate fluctuations are clearly divorced from real economic fundamentals and can be attributed to speculative tendencies," Mutsvangwa alleged.

Recently, Reserve Bank Governor, Dr John Mangudya blamed the slump on "demon" which he has are causing confusion among the citizens.

President Mnangagwa in March said the COVID-19 will likely derail the country from meeting its 2030 agenda targets.

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