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Zimbabwe Economic Forecast

By: EconomyWatch Content Team Date: 26 June 2010

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When it comes to a difficult economy, the Zimbabwe government realizes they have work cut out for them. One challenge is the financial deficit, which has been difficult to manage. In addition, the country’s currency exchange rate has been overvalued. Other issues currently being faced include low food stuffs for consumer use and high inflation rates. When Zimbabwe was involved with the war, literally hundreds of millions of dollars were siphoned from the economy. Since then, many obstacles must be overcome.

To help with the Zimbabwe economy, the government has created a land reform program but this too has experienced troubles. To support the high poverty level and low food products this country has depends heavily on imports. To assist, both the United States and the European Union provide food stuffs. Unfortunately, with Zimbabwe’s state debt on past loans and not being willing to implement reform to help stabilize the economy, assistance from the International Monetary Fund has been put on hold. While some areas of the economy have seen slight improvement, this country is in serious need of change.

Zimbabwe GDP Forecast

Interestingly, in looking back many years, Zimbabwe was actually one of the strongest economies in all of Africa but with millions of dollars being embezzled during war, the country is now in an economic crisis. Although assistance is being provided to the people of Zimbabwe in the form of food, a complete overhaul of the economic system is required. To determine the Zimbabwe GDP (Gross Domestic Product, Current Prices, US Dollars), several factors are considered. In 2008, the GDP was $3.93 billion in US dollars, followed by an 11.91% increase over the next year. For 2009, the GDP was at $4.397 billion, putting the country at number 143 for world rankings. For the future, experts speculate that 2010 will have a GDP of $5.14 billion. By 2015, the numbers are not expected to change much, closing the year at $6.82 billion in US dollars.

Zimbabwe Unemployment Forecast

Regarding the Zimbabwe population, the latest numbers show that just less than 12 million people live in this country. Because of money embezzled at the administration level and the difficult plateau topography of the country, poverty is high. Of the people living in Zimbabwe, it is estimated that just 3.84 million work. With this, the current Zimbabwe unemployment rate is an unbelievable 95%.

Zimbabwe Inflation Rate Forecast

For the Zimbabwe inflation rate to be determined, rather than using data for end-of-period, forecasters use information for the actual year. Information for 2009 has not been reported but in 1980, inflation for this country was just 7%. Then by 1996, it had increased to 16%. By 2008, the reported inflation rate was at 87%, with today’s numbers being even higher. The government understands that reform for this country to survive is critical but so far, things have not changed.

Zimbabwe Current Account Balance Forecast

Regarding the Zimbabwe current account balance, forecasters look at past data but also current transactions except those containing financial and/or capital items. At the close of 2008, the account balance was at minus $0.95 billion in US dollars, which followed with a 40% increase. Because of that change, 2009 closed at minus $1.323 billion, placing the country at number 131 worldwide. Regarding numbers for 2010, experts forecast the account balance will be minus $1.21 billion but then for 2015, a change is expected, putting the numbers at minus $0.936 billion in US currency.