Zimbabwe cut its economic growth forecast to 1.4 percent in 2016 from an initial forecast of 2.7 percent, the ministry of finance said, following a devastating drought and weak commodity prices.
The drought that has scorched crops in most of southern African, has left up to 4 million Zimbabweans facing hunger. Output of the staple maize is now expected at 450,000 tonnes, enough to last three and half months.
In an undated bulletin for the January to March quarter, the finance ministry put its new growth target in line with that of the International Monetary Fund and World Bank, banking on better performances in mining and service sectors.
“Despite the headwinds facing the economy, growth in 2016 is projected to remain positive at 1.4 percent. This is notwithstanding the budget projection of 2.7 percent,” according to the bulletin seen by Reuters on Monday.
Zimbabwe had during the first quarter signed contracts to import 469,000 tonnes of white maize from Mexico, South Africa and Zambia, and had 87,464 tonnes in its strategic grain reserves.
Gold production was, however, higher at 4,600 kilogrammes, up from 3,811 kilogrammes during the same period last year after bullion prices recovered.
But exports fell 13 percent to $626 million, compared to imports of $1.33 billion, reflecting Zimbabwe’s reliance on imports, which has left the country with a growing trade deficit and partly blamed for shortages of dollars in the economy.
The government issued $245 million in treasury bills in the first quarter to finance the budget and pay domestic debt. A total of $679 million would go towards paying government domestic loans this year.