Boston, MA -- (SBWIRE) -- 06/13/2014 -- Core Views:
- A month spent on the ground in Harare confirmed our view that the Zimbabwean economy is facing significant challenges mainly arising out of a severe shortage of liquidity. Although senior government figures have suggested that the foreign investment-deterring indigenisation drive might be moderated, we believe that international investors will need to see a track record of business friendly policy before engaging with the country. With this in mind, we think that challenges will continue and we are forecasting tepid economic growth of 3.1% in 2014.
- We predict that Zimbabwe will experience deflation over the coming months, with a possible return to inflation in the second half of the year as the South African rand strengthens. Even so, we stress that deflation poses a relatively minimal threat to the Zimbabwean economy given that reduced consumer demand would mostly weigh on imports.
- Zimbabwe's external accounts remain under pressure due to a massive import bill, lower remittance inflows and insufficient foreign direct investment. The trade account will remain firmly in the red for the foreseeable future. A return to health for the external accounts will therefore depend on the country's ability to attract foreign investment. Although there have been some signs of foreign investor-friendly reform over recent weeks, we believe that it will require a decent track record of reform before investors' concerns are assuaged.
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Major Forecast Changes:
- No major forecast changes
Key Risks To Outlook:
- The political environment presents the most salient risk to our outlook for the Zimbabwean economy. If ZANU-PF moderates its nationalistic stance, our forecasts will be rendered too pessimistic. However, if the party is even more aggressive in its efforts to indigenise the economy than we currently anticipate, GDP growth could well turn negative.
- Premature abandonment of the foreign currency regime would likely have a negative impact on the...
The Zimbabwe Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in The Zimbabwe and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..
An influential new analysis of The Zimbabwe's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).
- Forecast the pace and stability of The Zimbabwe's economic and industry growth through end-2017.
- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
- Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
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