Zimbabwe Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

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  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Zimbabwe Country Risk Report
Product Price
$1,195.00

Core Views:

  • Real GDP growth will improve slightly in 2016, as gold production increases on the back of stronger prices. That being said, poor weather will continue to weigh on economic activity and crop production and electricity generation, keeping growth low at 1.1%.

  • Further progress in Zimbabwe's efforts to re-establish itself with international lenders will be largely dependent on political considerations, as the expected increase in political instability associated with President Robert Mugabe's succession will encourage populist measures. However, a slow recovery in commodity prices will offer a strong incentive for the government to rein in spending.

  • Inflationary pressures will return to the Zimbabwean economy before year-end 2016, on the back of an increase in the money supply as a result of the government's policy to begin printing its own version of US dollars and the reestablishment of relations with multilateral lenders. The effects will be compounded by the ongoing drought across Southern Africa, driving up food prices, but the persistence of low fuel prices will help limit the extent to which inflation returns.

  • Severe drought across much of Southern Africa following the onset of El Nino will ensure Zimbabwe's current account deficit remains deep despite a severe shortage of dollars in the first half of the 2016. Although commodity prices are expected to stabilise over 2016, this will be insufficient to offer any buoy to exports, which will see another year of negative growth thanks to poor production.

  • While Robert Mugabe will see out the rest of his life in office, the emergence of a new political party, People First (PF), will add further pressure to the issue of his succession and improve the chances of a more contested transfer of power. Fears that they will further fragment the opposition are unwarranted.

Major Forecast Changes:

  • We have revised our expectations for inflation on the back of a planned increase in the money supply via the printing of money and reestablishment of relations with multilateral lenders. We now expect inflation to reach 1.0% after two years of deflationary conditions.

Key Risks:

  • The succession of President Robert Mugabe risks turning violent if plans are not put in place and set in motion prior to his departure, as competing vested interests struggle to fill the power vacuum left in his wake.

  • Premature abandonment of the foreign currency regime would likely have a negative impact on the economy.

  • The weather is also a major risk. The country has seen several droughts over the last two decades which have had a devastating impact on the important agricultural sector and there is always a risk of a recurrence of poor rains.

Long-Term Macroeconomic Forecasts (Zimbabwe 2016-2025)
Indicator 2016f 2017f 2018f 2019f 2020f 2021f 2022f 2023f 2024f 2025f
National Sources/BMI
Nominal GDP, USDbn 14.8 15.4 16.4 17.7 19.5 21.5 23.7 26.1 28.8 31.7
Real GDP growth, % y-o-y 1.1 1.6 3.2 5.6 6.7 5.9 5.9 5.8 5.8 5.7
Population, mn 16.0 16.3 16.7 17.1 17.5 17.8 18.2 18.6 19.0 19.4
GDP per capita, USD 957 967 1,002 1,059 1,138 1,229 1,329 1,440 1,560 1,691
Consumer price inflation, % y-o-y, ave -1.4 0.4 2.0 2.0 3.0 4.0 4.0 4.0 4.0 4.0
Current account balance, % of GDP -24.6 -24.3 -23.5 -22.3 -21.0 -19.6 -18.4 -17.2 -16.1 -15.1
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Growth Will Remain Weak On Adverse Weather Conditions
8
GDP By Expenditure Outlook
9
TABLE: GDP FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
9
TABLE: GOVERNMENT CONSUMPTION FORECASTS
9
TABLE: GROSS FIXED CAPITAL FORMATION FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Fiscal Policy And Public Debt Outlook
10
Fiscal Progress Clouded By Tense Political Climate
10
Structural Fiscal Position
11
TABLE: MAIN REVENUE & EXPENDITURE CATEGORIES
12
External Trade And Investment Outlook
12
Current Account Deficit Remains Deep On Weak Export Production
12
Monetary Policy
13
Inflation To Return On Increasing Money Supply And Food Shortages
13
Monetary Policy Framework
15
Chapter 2: 10-Year Forecast
17
The Zimbabwean Economy To 2025
17
Policy Risks To Constrain Long-Term GDP Growth
17
TABLE: LONG-TERM MACROECONOMIC FORECASTS
17
Chapter 3: Political Outlook
19
SWOT Analysis
19
BMI Political Risk Index
19
Domestic Politics
20
New Political Party Adds Another Challenge To Succession
20
TABLE: POLITICAL OVERVIEW
20
Long-Term Political Outlook
21
Succession Question Prompts Heightened Instability
21
Chapter 4: Operational Risk
23
SWOT Analysis
23
Operational Risk Index
23
Operational Risk
24
TABLE: OPERATIONAL RISK
24
Economic Openness
25
TABLE: FREE-TRADE AGREEMENTS
29
TABLE: FREE TRADE ZONES AND INVESTMENT INCENTIVES
31
Availability Of Labour
32
TABLE: SUB-SAHARAN AFRICA - AVAILABILITY OF LABOUR RISK
33
TABLE: TOP 10 MIGRANT SOURCE COUNTRIES
37
TABLE: EMPLOYMENT BY SECTOR, '000
38
Chapter 5: BMI Global Macro Outlook
41
Global Macro Outlook
41
Tentative Stability, But New Risks Emerging
41
TABLE: GLOBAL ASSUMPTIONS
41
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
42
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
43
TABLE: MACROECONOMIC DATA & FORECASTS
45

Assess your risk exposure in Zimbabwe with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Zimbabwe with confidence.

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