Zimbabwe Business Forecast Report Q1 2015

Date: November 15, 2014
Pages: 36
Price:
US$ 1,195.00
Publisher: Business Monitor International
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: Z9E5FBAC01CEN
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Zimbabwe Business Forecast Report Q1 2015
Core Views

The political emergence of President Robert Mugabe’s wife Grace undermines Vice-President Joice Mujuru’s leadership ambitions. A clearer picture of the ongoing power struggle will emerge after the ruling ZANU-PF parity holds its congress in December.

Zimbabwean economic growth will remain constrained by political risk, policy uncertainty, low commodity prices and a depreciating South African rand. A clear mandate for a reformist regime following the December ZANU-PF conference presents upside risks to our 2015 real GDP growth forecast of 2.7%.

The Zimbabwean economy will remain near deflationary territory over the coming quarters owing to weak demand, a depreciating South African rand and low oil prices.
Executive Summary
Core Views
Key Risks To Outlook

CHAPTER 1: POLITICAL OUTLOOK

SWOT Analysis
BMI Political Risk Index
Domestic Politics
Succession Question Nearing An Answer
The political emergence of President Robert Mugabe's wife Grace undermines Vice-President Joice Mujuru's leadership ambitions. A clearer picture of the ongoing power struggle will emerge after the ruling ZANU-PF party holds its congress in December.
  TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Mugabe's New Term: Key Challenges
Zimbabwe faces an uncertain political future following the resounding victory of President Robert Mugabe and his ZANU-PF party in the 2013. The main policy issues are likely to be the party's drive to indigenise the economy; questions about the independence of the judiciary and security services; and the Zimbabwean government's turbulent relationship with the West. The race to succeed the ageing Mugabe will also feature prominently in the years ahead.

CHAPTER 2: ECONOMIC OUTLOOK

SWOT Analysis
BMI Economic Risk Index
Economic Activity
Political Uncertainty, Weak Rand Weighing On Economy
Zimbabwean economic growth will remain constrained by political risk, policy uncertainty, low commodity prices and a depreciating South African rand. A clear mandate for a reformist regime following the December ZANU-PF conference presents upside risks to our 2015 real GDP growth forecast of 2.7%.
    Table: Economic Activit y
Monetary Policy
Inflation To Remain Near Zero Into 2015
The Zimbabwean economy will remain near deflationary territory over the coming quarters owing to weak demand, a depreciating South African rand and low oil prices.
    Table: Monetar y Polic y
Banking Sector
Banking Crisis Risks Growing
Increasing asset growth is not a sign that Zimbabwe's banks are returning to health as the source of this asset growth is not sustainable. The sector continues to face significant challenges arising from high non-performing loans and tight liquidity. The absence of a lender of last resort means risks of a major banking sector crisis remain high.
Regional Economic Outlook
Oil At USD60/bbl Would Be Negative For Region
Oil prices at USD60/bbl would have a harmful impact on Sub-Saharan Africa's economic growth outlook as the negative shock to the region's net oil exporters would be greater than the boost received by net oil importers. Exporters would face deteriorating fiscal and external positions, with Sudan particularly at risk. Importers would see their terms of trade improve and, in some cases, inflation decline. Kenya would likely be the biggest beneficiary of low oil prices.

CHAPTER 3: 10-YEAR FORECAST

The Zimbabwean Economy To 2023
Policy Risks To Constrain Long-Term GDP Growth
The performance of the Zimbabwean economy will remain inextricably linked to the policy and political climate over the coming years. Although the trajectory of this is difficult to predict, at this juncture we believe that the economy will expand but only at a very subdued rate as much-needed foreign investment will remain at bay owing to nationalistic policies of the ZANU-PF dominated government.
    Table: Long -Term Macroeconomic Forecasts

CHAPTER 4: OPERATIONAL RISK

SWOT Analysis
Operational Risk Index
Operational Risk
  Table: Operational Risk
Transport Network
    Table: Sub -Saharan Africa - Transport Network Risks
Economic Openness
    Table: Sub -Saharan Africa - Economic Openness Risk
    Table: Imports
  Table: Top Export Partners

CHAPTER 5: BMI GLOBAL ASSUMPTIONS

Global Outlook
Reality Check: Uncertainty Reigns
    Table: Global Assumptions
    Table: Developed States , Real GDP GrowtH , %
    Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
    Table: Emerging Markets , Real GDP Growt h, %
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