by Derick Tsimba
A UK based leading source of analysis on international business and world affairs, The Economist Group through its Economic Intelligence Unit (EIU) reporting on Zimbabwe 3rd Quarter 2020, has said the country’s economy is on the rebound as its exchange rate will average Z$28: US$1 in the 3rd Quarter of 2020.
In its Country Report on Zimbabwe, the EIU said Zimbabwe’s 3rd Quarter 2020 will see the country’s foreign currency exchange rate averaging Z$28: US$1. The EIU also said the exchange rate should average Z$35: US$1 for the next five years and its peak being Z$41: US$1 in 2024.
The UK source for economic intelligence said inflation in Zimbabwe was going to drop in 2021 facilitating a movement away from using the US dollar.
“Inflation will average 498.3% in 2020 owing to huge growth in the money supply base. From 2021, inflation will fall as this deficit financing ceases and domestic confidence in the currency is gradually rebuilt, facilitating a movement away from use of US dollars,” predicted the EIU.
The African Development Bank (AfDB) in its latest African Economic Outlook 2020 report also indicated that Zimbabwe’s economy will emerge stronger in 2021.
AfDB was quoted in the Herald saying: “Coupled with policy responses to restore stability in the foreign exchange market and control inflation, the economy could modestly recover in 2021.
“Zimbabwe can emerge from the current health and economic crisis strongly. The country’s vast natural resources, public infrastructure still in relatively good condition, and a skilled labour force give the country an opportunity to join supply chains in Africa and increase trade within the context of the African Continental Free Trade Area.”
Zimbabwe like most African countries has been affected by the COVID-19 pandemic, which has slowed down economic activities. The country has also been affected by the poor performance of the agriculture sector due to climate change, which saw poor rains being received during the 2019/ 2020 farming season.
The two reports by the EIC and AfDB are a slap in the face of the country’s detractors who had been propagating the narrative that the economy of the country was on its last legs.
