Harare, Jan 31 Zimbabwe's economic outlook is positive, with growth expected to increase to six per cent in 2025, up from two per cent last year on the back of an anticipated recovery in agriculture and robust growth in industry and services, the World Bank (WB) said Friday.
"Zimbabwe's economic outlook is positive, with recovery from the 2019/2020 Covid-19 recession and the 2024 El Nino-related drought," the WB said in its latest Zimbabwe Economic Update report.
The report, titled 'Improving Resilience to Weather Shocks and Climate Change', highlighted the opportunity for Zimbabwe to strengthen resilience to climate shocks and climate resilience to further boost growth.
According to the report, Zimbabwe's economic recovery in 2025 is mainly due to a broad-based post-drought recovery, as agriculture, a critical pillar of the economy, is expected to grow by almost 13 per cent, driven by the recovery in maize and tobacco production.
The report also noted that Zimbabwe's mining sector continues to exhibit strong growth, bolstered by rising gold prices and new investments that are expected to increase lithium production as well as iron and steel manufacturing.
"Similarly, the tourism industry is growing rapidly, with increasing numbers of international arrivals and hotels' bed occupancy," the report said.
The manufacturing sector, however, has seen lackluster growth, driven in part by power shortages due to drought, as declining water levels in Lake Kariba have affected Zimbabwe's hydroelectric power generation, the report said.
To boost economic growth, the WB said Zimbabwe would need to continue tackling its macroeconomic challenges to ensure price and exchange rate stability, Xinhua news agency reported.
The southern African country also needs to continue its engagement efforts on arrears clearance and debt resolution through the Structured Dialogue Platform, the WB said.
"In restoring macroeconomic stability, it will be essential to minimize the impact of economic reforms on vulnerable households. It will be critical for the government and development partners to identify ways to support vulnerable households," the WB said.
Eneida Fernandes, WB Country Manager for Zimbabwe, stressed the need for Zimbabwe to enhance irrigation development and investment in landscape and watershed management to bolster the country's resilience against climate-related shocks.
"Climate shocks such as the drought undermine sustainable development and exacerbate poverty levels, making it imperative to enhance the resilience of the agricultural sector," Fernandes said.
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