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Zimbabwe Economic Update, February 2016 : Changing Growth Patterns

WASTE TARIFFS EMPOWERMENT LAND ADMINISTRATION SYSTEM CREDIT MARKETS MONETARY POLICY RISKS CAPITAL MARKETS HEALTH PLANNING ECONOMIC GROWTH PROFIT MARGINS DEVELOPMENT ASSISTANCE DEPOSITS PEOPLE POLICY ENVIRONMENT AGRICULTURAL CREDIT FINANCING FISCAL DEFICITS LENDING POLICIES INTEREST ANTENATAL CARE LAWS EMPLOYMENT OPPORTUNITIES EQUITABLE ACCESS GOVERNMENT FUNDING INTEREST RATE PROPERTY RIGHTS INCOME GROUP BANKING SYSTEM ECONOMIC DEVELOPMENTS REVENUES FISCAL POLICY WELFARE HEALTH LOAN FEE BORROWERS ASSET MANAGEMENT PAYMENTS CREDITORS DEBT BURDEN CREDITOR LENDER PUBLIC HEALTH LIFE EXPECTANCY BANK LENDING KNOWLEDGE ECONOMIC ACTIVITY LABOR MARKET DIABETES SAVINGS IRON LENDER-OF-LAST-RESORT PATIENT COMMERCIAL BANK AGRICULTURAL MARKETS EXPORT EARNINGS INTERVENTION ACCESS TO FINANCING CURRENT ACCOUNT DEBTS HEALTH INDICATORS FINANCES PHONE PENETRATION INTEREST RATES NURSES ECONOMIC EMPOWERMENT PAYMENT DEBT CAPITAL MARKET PRIVATE INVESTMENT LIMITED ACCESS PENETRATION RATE BANKERS LOANS FOLIC ACID FARMERS CAPITAL STOCKS SOCIAL DEVELOPMENT BANK CREDIT MORTALITY SMALLHOLDERS REAL ESTATE HOUSEHOLD INVESTMENTS CHILD CARE FINANCE DONOR SUPPORT MEDICAL TREATMENT ADMINISTRATIVE COSTS PUBLIC INVESTMENT BANK DEPOSITS INVESTMENT DECISIONS BANKS FISCAL DEFICIT EXPENDITURE INSTITUTIONAL REFORMS EQUITY HUMAN CAPITAL LAND MARKET WORKERS AFFORDABILITY CAPITAL CREDIT FACILITY PATIENT SATISFACTION CUSTOMER BASE USER FEES FIXED CAPITAL INVESTMENT FAMILY SOURCE OF INCOME BANK FOREIGN DIRECT INVESTMENT CREDIT FIXED CAPITAL PURCHASING POWER FOREIGN INVESTMENT HEALTH OUTCOMES SMALLHOLDER URBAN AREAS HOUSEHOLD FINANCIAL BURDEN PRICE STABILITY AGRICULTURAL SECTOR FAMILY PLANNING EXPENDITURES CAPITAL FLOWS PROPERTY SMALLHOLDER FARMERS LOAN PORTFOLIO MEASUREMENT INSTITUTIONAL CAPACITY CREDIT BUREAU BUSINESS CONFIDENCE DIVERSIFICATION COLLABORATIVE RELATIONSHIP WASTE DISPOSAL INTERNET EXPORT CROPS ACCESS TO CREDIT WEIGHT COMMUNICABLE DISEASES ECONOMIC DEVELOPMENT CHILDREN SECURITY BANKERS ASSOCIATION CLINICS WORKING CONDITIONS INVESTMENT EXTREME POVERTY FINANCIAL INTERMEDIATION HOUSEHOLDS ACCESS TO SERVICES BALANCE SHEETS ECONOMIC CRISIS EQUALITY PUBLIC FINANCES ISOLATION TARIFF PRIVATE INVESTORS EXTERNAL SHOCKS REVENUE EARNINGS INVESTMENTS BORROWING FINANCIAL SUPPORT TECHNICAL SUPPORT INSECURE PROPERTY STRATEGY FEES FISCAL DISCIPLINE DONOR FUNDING REMITTANCES HOSPITALS CAPITAL INVESTMENT FOOD PROCESSING ARREARS IMPORT DUTIES IMPLEMENTATION HEALTH SERVICES CAPITAL ACCOUNT CAPITAL COSTS GUARANTEE CREDIT REGISTRY DEVELOPMENT BANK INEQUALITY LAND ADMINISTRATION
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World Bank, Washington, DC
Africa | Zimbabwe
2016-02-25T22:45:34Z | 2016-02-25T22:45:34Z | 2016-02

Low export prices and high production costs are contributing to a persistent deficit in the external accounts. Despite narrowing somewhat in recent years, Zimbabwe’s current account deficit remains much larger than those of comparable countries in the region, and exports currently amount to just over half of imports. A decline in global prices for gold, platinum and other mineral commodities, coupled with unresolved supply-side constraints, has reduced the value of mining exports. Zimbabwe has also benefited from lower oil prices, but rising import volumes largely offset the impact on import values. Remittances gradually increased during 2010-2015 and are estimated to have reached almost 7 percent of Gross National Income (GNI) in 2015. The domestic financial sector is slowly recovering from a post-dollarization credit boom and interest rates remain elevated. The Central Bank has stabilized the financial sector, a recent growth of broad money looks robust and bank lending has become market-driven. But still only blue-chip borrowers are able to access financing at competitive rates. The authorities are taking measures to update Zimbabwe’s credit infrastructure, strengthen oversight and restore the regulatory framework. Zimbabwe is experiencing a deflationary trend in response to these macroeconomic imbalances. The multicurrency regime, adopted in 2009, limits monetary policy instruments available to the authorities but also provides a level of fiscal and economic restraint. As competitive pressures increased, the consumer price index fell -2.5 percent, year-on-years, at end-2015. Declining prices should help to restore competitiveness over time, but should be accompanied by efforts to raise productivity at all levels of the economy.

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