RBZ projects 2% growth amid El Niño drought

Staff Writer

The Reserve Bank of Zimbabwe (RBZ) says despite the ongoing El Niño-induced drought, the economy has remained resilient and is anticipated to grow 2% this year.

El Niño, a cyclical warming of the Pacific Ocean, disrupts global weather patterns, leading to erratic rainfall and scorching temperatures in Southern Africa, including Zimbabwe.

This year, the phenomenon has resulted in significantly reduced precipitation, threatening agricultural production – the lifeblood of the Zimbabwean economy.

The country declared a state of disaster as it experienced failed harvests with well below average yield outcomes attributed to the cessation of seasonal rains combined with dry and hot conditions.

The RBZ Monetary Policy Committee (MPC) painted a cautiously optimistic picture of the nation’s economy, highlighting the positive impact of the monetary policy measures, which have stabilised the exchange rate and domestic prices.

“Despite the effects of the El Niño-induced drought, the economy has remained resilient and is expected to grow at around 2% in 2024,” the RBZ MPC said.

The El Niño phenomenon is not new to Zimbabwe. The country has faced similar droughts in the past, most recently in 2016. Back then, the drought triggered a national disaster declaration, with millions facing food shortages.

For the 2023/24 agricultural season, both agricultural production and productivity were severely and negatively impacted by the worst drought-induced El Niño in 40 years according to the government.

Zimbabwe crop production figures estimate that the 2023/24 summer season is expected to yield 744 271 metric tonnes in production, a 77 percent decline due to the drought.

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