It has downgraded the country's growth prospects to 2 percent only two months after the global lender had projected gross domestic product will expand 3 percent.
Even beyond 2014, the
The 2 percent GDP growth is way below 6,1 percent Finance and Economic Development Minister
The GDP growth was to be mainly underpinned by mining and agricultural sectors. Analysts say the economic performance is painting a gloomy picture and there is a gross sense of worry in the market. The 6,1 percent GDP growth was received with high skepticism by the market and currently, there seems to be some justification to this skepticism as most economic performance indicators have tumbled.
At the current pace, "one tends to fear that the economy might be headed for doom should there be no major shifts in policy," according to local economic analysts.
In its April economic briefing on
Further, the multilateral lender contends that the after effects of the economic slowdown of last year will slow down growth. It said the 2014 growth projections for
"The global environment may affect the Zimbabwean economy through the stronger US dollar, lower global demand for key exports, weaker commodity prices and reduced capital inflows to developing countries," the
Focusing on the Sub-Saharan Africa, the
Fiscal and current account deficits have widened across the region. Ambitious public investment programs, large increases in public wages, and rising transfers and subsidies, coupled with weak revenues, as a result of weak commodity prices, have contributed to the deterioration of fiscal balances in many countries, the bank said.
Among middle-income countries, the debt-to-GDP ratio rose to 45,9 percent in
In this environment,
The increased cost of borrowing reflected not only falling investor demand for frontier market debt but also country-specific risks, including concerns about the country's rising budget deficit.
Despite emerging challenges, medium-term growth prospects for Sub-Saharan Africa remain favourable.
"Regional gross domestic product growth is projected to remain stable at 4,7 percent in 2014, strengthening to 5,1 percent in each of 2015 and 2016, supported by net foreign direct investment flows in the resource sectors, public investment in infrastructure, and improved agricultural production, according the
The strengthening recovery in high-income countries bodes well for export demand and investment flows, although weaker commodity prices and slower growth in emerging markets will moderate growth of FDI flows to the region to
"This would support growth in many countries."
Besides FDI, the continued focus on expanding public infrastructure to ease supply bottlenecks is expected to provide further impetus to growth in the region. The inflation outlook is expected to remain favourable across the region, although prices will trend higher due to higher food prices in some countries or pass-through from currency depreciations in others, particularly
At the sub-regional level, growth is expected to be strong in
Growth is projected to remain robust in
"The risks to the region's outlook remain skewed to the downside and include lower commodity prices brought on by weaker growth in emerging markets, especially
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