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Zimbabwe central bank warns negative economic growth

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(Globalpost/GlobalPost)

Zimbabwe central bank warns negative economic growth

HARARE, May 29 (Xinhua) -- A senior Reserve Bank of Zimbabwe official warned Thursday that Zimbabwe's economic growth could slip into the negative territory in the next year or two if structural bottlenecks afflicting the economy are not urgently addressed.

Simon Nyarota, a senior division chief for the economics, research and policy enhancement department told delegates at the Confederation of Zimbabwe Industries annual general meeting that Zimbabwe's economic growth since 2012 has been volatile and was projected to further dip in 2014.

The country registered positive economic growth rates of above 10 percent between 2009 and 2011 following the adoption of multiple currencies but since 2012 growth has slowed down to below 5 percent due to depressed foreign investment inflows.

"A growth rate of 3.1 percent is anticipated in 2014 and if we do not do anything, I think we are going into negative territory in the next year or two," Nyarota said, "the economic decline will be similar to that experienced in 2007-2008 and it will be worse because we don't have anything to count on to stabilize the economy immediately."

The Zimbabwean government adopted the use of multiple currencies in 2009 to stabilize an economy that had been ravaged by a decade of hyperinflation and serious economic contraction.

Nyarota said the country was at a crossroads and needed urgent solutions to structural bottlenecks which he said have not been looked at seriously in the last 10-15 years.

Zimbabwe is grappling with deteriorating infrastructure, a debt overhang of about 9 billion U.S. dollars, a widening trade deficit constituting 30 percent of GDP, sluggish export performance, high country risk perception and depressed foreign direct investment among other challenges.

"So it is either we take corrective action or we slide into the negative territory," he said.

http://www.globalpost.com/dispatch/news/xinhua-news-agency/140529/zimbabwe-central-bank-warns-negative-economic-growth