HARARE, Apr 26 (Xinhua): The World Bank (WB) has downgraded Zimbabwe's economic growth rate projection in 2014 from 4.2 per cent to 3 per cent due to low investment, weak growth in mining sector and adverse effects from the global economy.
The global financial institution said in its April Zimbabwe Economic Briefing that the global environment may affect the Zimbabwean economy through stronger US dollar, lower global demand for key exports, weaker commodity prices and reduced capital inflows to developing countries.
Zimbabwe has been using multiple currencies since 2009 with US dollar being the currency of reference.
"The carry over effects of the 2013 slowdown are also likely to weigh down on 2014 growth," the WB said.
The Zimbabwe government projected the economy to growth by 6.1 per cent in 2014 after a lacklustre growth of 3.4 per cent in 2013.
But a biting liquidity crunch that has forced a number of companies to either downsize or close shop and an acute shortage of lines of credit may dampen the envisaged 6 per cent growth rate.
The WB said in its briefing that Zimbabwe's agriculture that has been affected by unreliable weather patterns in recent years, will rebound by 7.3 per cent in 2014, down from the 9 per cent projected by government while recovery in the mining sector is expected to remain muted at 3.3 per cent.
The manufacturing sector, suffering from declining capacity utilisation, is expected to remain in lacklustre performance of 1. 4 per cent, the global financial institution said.
The WB said Zimbabwe's outlook remained further clouded by downside risks, emanating from lower international prices of minerals, vulnerability in the banking sector, policy inconsistencies affecting investment, deflationary pressures, fiscal slippages and the unbalanced external position.
