HARARE – Finance Minister Mthuli Ncube has revised down the country’s projected economic growth this year to two percent from 3.5 percent earlier forecast due to the devastating impact of drought.

In his mid-term budget statement presented to parliament Thursday, Ncube said projected increased winter wheat production in the current season could help offset the impact of the drought on the agriculture sector.

Zimbabwe expects to rake in 600,000 tonnes of wheat this year, up from around 400,000 tonnes achieved last year, output which will not only ensure domestic self-sufficiency, but sizeable export potential as well.

“This downward revision (of economic growth) is mainly attributed to the more severe than expected impact of the El-Nino induced drought on agricultural output,” he said.

“The growth projection is, however, subject to upside potential as wheat output during this winter season could be higher than projected. This would reduce the contraction of the agriculture sector and ultimately improve the overall GDP outcome for the year.”

Ncube said other sectors of the economy such as tourism were still expected to grow as earlier projected.

“Looking at the other sectors, the accommodation and food sector will do very well, so will the ICT, so will the tourism,” Ncube said.

He said the introduction of a new gold-backed national currency, the Zimbabwe Gold (ZiG) in April this year instantly stabilised pricing in the economy.

“Government undertook currency reforms culminating in the introduction of the Zimbabwe God (ZIG), replacing the Zimbabwe dollar on 5th April 2024. In that regard, the ZIG month-on-month inflation remained stable at 0 percent in June from -2.4 percent in May 2024, while the US$ month-on-month inflation stood at -0.3 percent from 0.1 percent in May.

“In the outlook period, inflationary pressures are expected to remain subdued due to the tight monetary and fiscal policies being pursued by the authorities aided by the dissipating negative inflation expectation as the local currency unit remains stable against major currencies,” he added.