Zimbabwe Economic Update, June 2017
Zimbabwe’s economy grew by 0.7 percent in 2016 despite the combined effect of the El Nino drought and domestic financial turmoil. The drought reduced agricultural output and increased food prices towards the end of the year, despite the government’s efforts to boost production and stabilize prices. The public provision of agricultural inputs, the creation of food-for-work programs, and the establishment of price supports for staple foods accentuated the government’s expansionary fiscal-policy stance. Meanwhile, the government also increased spending on a cash basis to clear domestic arrears. The authorities financed much of the widening fiscal deficit by issuing Treasury bills purchased by commercial banks and a US$ 1 billion overdrafts with the RBZ. As domestic borrowing reduced liquidity and crowded out credit to the private sector, demand fell, imports contracted sharply, and economic growth slowed. Good rains are projected to boost growth in 2017 but other sectors remain lackluster. To allow GDP growth to recover in 2017 and beyond, the authorities will need to improve public expenditure efficiency and ensure adequate liquidity in the financial sector. The newly introduced command agriculture program provided farmers with inputs which are to be repaid by delivering grain to the Grain Marketing Board at the end of the growing season. These policies are projected to boost agricultural output in 2017. However, government intervention is both expensive and inefficient, especially the use of price support, as floor prices are set far higher than import competing prices.4 Favorable rains during the 2016/17 agricultural season are expected to drive a robust recovery, and the agricultural sector is projected to make a sizeable contribution to GDP growth in 2017. Improving weather conditions will be complemented by the ongoing suspension of import duties on some fertilizer products through end-2017, and by the ongoing allocation of underutilized land managed by the parastatal ARDA and other government agencies to experienced farmers.
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Format: | Report biblioteca |
Language: | English en_US |
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World Bank, Washington, DC
2017-06-21
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Subjects: | ECONOMIC GROWTH, POVERTY, FISCAL POLICY, MONETARY POLICY, TRADE, LOCAL GOVERNMENT, STATE-OWNED ENTERPRISES, |
Online Access: | http://documents.worldbank.org/curated/en/333081497536246610/The-state-in-the-economy https://hdl.handle.net/10986/27474 |
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dig-okr-10986274742024-08-07T19:39:17Z Zimbabwe Economic Update, June 2017 The State in the Economy World Bank ECONOMIC GROWTH POVERTY FISCAL POLICY MONETARY POLICY TRADE LOCAL GOVERNMENT STATE-OWNED ENTERPRISES Zimbabwe’s economy grew by 0.7 percent in 2016 despite the combined effect of the El Nino drought and domestic financial turmoil. The drought reduced agricultural output and increased food prices towards the end of the year, despite the government’s efforts to boost production and stabilize prices. The public provision of agricultural inputs, the creation of food-for-work programs, and the establishment of price supports for staple foods accentuated the government’s expansionary fiscal-policy stance. Meanwhile, the government also increased spending on a cash basis to clear domestic arrears. The authorities financed much of the widening fiscal deficit by issuing Treasury bills purchased by commercial banks and a US$ 1 billion overdrafts with the RBZ. As domestic borrowing reduced liquidity and crowded out credit to the private sector, demand fell, imports contracted sharply, and economic growth slowed. Good rains are projected to boost growth in 2017 but other sectors remain lackluster. To allow GDP growth to recover in 2017 and beyond, the authorities will need to improve public expenditure efficiency and ensure adequate liquidity in the financial sector. The newly introduced command agriculture program provided farmers with inputs which are to be repaid by delivering grain to the Grain Marketing Board at the end of the growing season. These policies are projected to boost agricultural output in 2017. However, government intervention is both expensive and inefficient, especially the use of price support, as floor prices are set far higher than import competing prices.4 Favorable rains during the 2016/17 agricultural season are expected to drive a robust recovery, and the agricultural sector is projected to make a sizeable contribution to GDP growth in 2017. Improving weather conditions will be complemented by the ongoing suspension of import duties on some fertilizer products through end-2017, and by the ongoing allocation of underutilized land managed by the parastatal ARDA and other government agencies to experienced farmers. 2017-06-29T21:16:34Z 2017-06-29T21:16:34Z 2017-06-21 Report Rapport Informe http://documents.worldbank.org/curated/en/333081497536246610/The-state-in-the-economy https://hdl.handle.net/10986/27474 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank application/pdf text/plain World Bank, Washington, DC |
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Estados Unidos |
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biblioteca |
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America del Norte |
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English en_US |
topic |
ECONOMIC GROWTH POVERTY FISCAL POLICY MONETARY POLICY TRADE LOCAL GOVERNMENT STATE-OWNED ENTERPRISES ECONOMIC GROWTH POVERTY FISCAL POLICY MONETARY POLICY TRADE LOCAL GOVERNMENT STATE-OWNED ENTERPRISES |
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ECONOMIC GROWTH POVERTY FISCAL POLICY MONETARY POLICY TRADE LOCAL GOVERNMENT STATE-OWNED ENTERPRISES ECONOMIC GROWTH POVERTY FISCAL POLICY MONETARY POLICY TRADE LOCAL GOVERNMENT STATE-OWNED ENTERPRISES World Bank Zimbabwe Economic Update, June 2017 |
description |
Zimbabwe’s economy grew by 0.7 percent
in 2016 despite the combined effect of the El Nino drought
and domestic financial turmoil. The drought reduced
agricultural output and increased food prices towards the
end of the year, despite the government’s efforts to boost
production and stabilize prices. The public provision of
agricultural inputs, the creation of food-for-work programs,
and the establishment of price supports for staple foods
accentuated the government’s expansionary fiscal-policy
stance. Meanwhile, the government also increased spending on
a cash basis to clear domestic arrears. The authorities
financed much of the widening fiscal deficit by issuing
Treasury bills purchased by commercial banks and a US$ 1
billion overdrafts with the RBZ. As domestic borrowing
reduced liquidity and crowded out credit to the private
sector, demand fell, imports contracted sharply, and
economic growth slowed. Good rains are projected to boost
growth in 2017 but other sectors remain lackluster. To allow
GDP growth to recover in 2017 and beyond, the authorities
will need to improve public expenditure efficiency and
ensure adequate liquidity in the financial sector. The newly
introduced command agriculture program provided farmers with
inputs which are to be repaid by delivering grain to the
Grain Marketing Board at the end of the growing season.
These policies are projected to boost agricultural output in
2017. However, government intervention is both expensive and
inefficient, especially the use of price support, as floor
prices are set far higher than import competing prices.4
Favorable rains during the 2016/17 agricultural season are
expected to drive a robust recovery, and the agricultural
sector is projected to make a sizeable contribution to GDP
growth in 2017. Improving weather conditions will be
complemented by the ongoing suspension of import duties on
some fertilizer products through end-2017, and by the
ongoing allocation of underutilized land managed by the
parastatal ARDA and other government agencies to experienced farmers. |
format |
Report |
topic_facet |
ECONOMIC GROWTH POVERTY FISCAL POLICY MONETARY POLICY TRADE LOCAL GOVERNMENT STATE-OWNED ENTERPRISES |
author |
World Bank |
author_facet |
World Bank |
author_sort |
World Bank |
title |
Zimbabwe Economic Update, June 2017 |
title_short |
Zimbabwe Economic Update, June 2017 |
title_full |
Zimbabwe Economic Update, June 2017 |
title_fullStr |
Zimbabwe Economic Update, June 2017 |
title_full_unstemmed |
Zimbabwe Economic Update, June 2017 |
title_sort |
zimbabwe economic update, june 2017 |
publisher |
World Bank, Washington, DC |
publishDate |
2017-06-21 |
url |
http://documents.worldbank.org/curated/en/333081497536246610/The-state-in-the-economy https://hdl.handle.net/10986/27474 |
work_keys_str_mv |
AT worldbank zimbabweeconomicupdatejune2017 AT worldbank thestateintheeconomy |
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1807157633528889344 |