Business Monitor International


Zimbabwe Business Forecast Report

Published 28 May 2014

  • 35 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$1,195.00
Zimbabwe Business Forecast Report

Core Views:

  • Challenges for Zimbabwe's economy continue to mount and we have downgraded our 2014 and 2015 growth forecasts to 1.7% and 2.2% respectively from 3.1% and 3.3% previously. Only a real contraction in imports, on the back of weak domestic demand, has prevented us from revising the headline forecast into negative territory.

  • Lower historic and forecast current account deficits do not indicate a stabilisation of the external accounts. They are rather the result of weak import demand that is a stark illustration of the difficulties being faced by the Zimbabwean economy.

  • Inflation in Zimbabwe will remain in negative or very low positive territory over the coming 12 months. The extent to which this boosts purchasing power will be limited by the effect that rand weakness has had on the dollar value of remittances from South Africa.

Major Forecast Changes:

  • We have downgraded our 2014 and 2015 growth forecasts to 1.7% and 2.2% respectively from 3.1% and 3.3% previously.

Key Risks To Outlook:

  • The political environment presents the most salient risk to our outlook for the Zimbabwean economy. If ZANU-PF moderates its nationalistic stance, our forecasts will be rendered too pessimistic. However, if the party is even more aggressive in its efforts to indigenise the economy than we currently anticipate, GDP growth could well turn negative.

  • 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 2014-2023)
Indicator 2014f 2015f 2016f 2017f 2018f 2019f 2020f 2021f 2022f 2023f
Nominal GDP, USDbn 10.8 11.6 12.7 13.8 15.1 16.7 18.5 20.3 22.3

Table of Contents

Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Ratings
7
Domestic Politics
8
MDC Split To Have Little Short-Term Impact
8
TABLE: POLITICAL OVERVIEW
8
Long-Term Political Outlook
9
Mugabe's New Term's Key Challenges
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
On The Ground: Liquidity Challenges Worse Than Ever
14
Table: GDP By Expenditure
14
Balance Of Payments
16
External Account Pressures To Remain
16
Table: Current Account
16
Monetary Policy
17
Deflation To Persist But Economic Damage Will Be Limited
17
Table: Monetary Policy
18
Banking Sector
19
Banking Sector Woes Continue
19
Chapter 3: 10-Year Forecast
21
The Zimbabwean Economy To 2023
21
Policy Risks To Constrain Long-Term GDP Growth
21
Tab le: ZIMBABWE Long -Term Forecasts
21
Chapter 4: Business Environment
23
SWOT Analysis
23
BMI Business Environment Risk Ratings
23
Business Environment Outlook
24
Institutions
24
TABLE: BMI BUSINESS AND OPERATION RISK RATINGS
24
Table: BMI LEGAL FRAMEWORK RATING
25
Infrastructure
26
Table: LABOUR FORCE QUALITY
26
TABLE: AFRICA - ANNUAL FDI INFLOWS
27
Market Orientation
28
Table: TRADE AND INVESTMENT RATINGS
29
Operational Risk
30
TABLE: TOP EXPORT DESTINATIONS (USDmn)
30
Chapter 5: BMI Global Assumptions
31
Global Outlook
31
Growth Increasingly Polarised
31
Table: Global Assumptions
31
Tab le: Developed States , Rea l GDP Growt H, %
32
Tab le: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
32
Tab le: Emerging Mar kets , Rea l GDP Growth , %
33

The Zimbabwe Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in The Zimbabwe and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market..

An influential new analysis of The Zimbabwe's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

  • Forecast the pace and stability of The Zimbabwe's economic and industry growth through end-2017.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise The Zimbabwe's country risks against regional peers using BMI's country comparative Risk Ratings system.
  • Evaluate external threats to doing business in The Zimbabwe, including currency volatility, the commodity price boom and protectionist policies.

The Zimbabwe Business Forecast Report by Business Monitor International (BMI) includes three major sections: Economic Outlook, Political Outlook and Business Environment.

Economic Outlook:

How will the Zimbabwean economic policy-making and performance impact on corporate profitability over 2013-2017?

BMI provides our fully independent 5-year forecasts for The Zimbabwe through end-2017 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Zimbabwe Business Forecast Report features BMI's forecasts with supporting analysis for 2013 through to end-2017, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Ratings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector exposure).
  • Global Assumptions - forecasts for each year to end-2017 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for The Zimbabwe and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on The Zimbabwe, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in The Zimbabwe over the next 5-years?

BMI's The Zimbabwe country Risk Ratings evaluate the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Zimbabwean Market - Political Strengths, Weaknesses, Opportunities and Threats facing The Zimbabwe.
  • Political Stability and Risk Assessment - BMI's Risk Ratings assess explicit short- and long-term risks to political stability; latest ratings, rankings and trends for The Zimbabwe's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.

Key Benefits

  • Benchmark The Zimbabwe's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Business Environment

Business Environment Risk Ratings with SWOT Analysis - Business environment Risk Ratings for The Zimbabwe, benchmarked against ratings for regional neighbours.

Country Competitiveness - Competitiveness of The Zimbabwe's business operating environment in supporting corporate growth and profitability, compared with regional neighbours.

Business Environment Contents

  • Domestic Environment - Transparency, cronyism and corruption; labour market flexibility; corporate tax burden; interest rate levels; sophistication of banking sector and stock market; levels of business confidence; infrastructure and IT.
  • Foreign Direct Investment - Analysis of foreign investment regime; foreign ownership laws; attractiveness of business environment to foreign investors.
  • Foreign Trade - Analysis of trading environment, government trade policy, liberalisation measures, tariffs and membership of trade areas.

Key Benefits

  • Assess your company's evolving exposure to country specific operational and business risks, using BMI's in-depth analysis of the legal and regulatory business environment.
  • Understand your market's comparative strengths and weaknesses in the key areas of commercial infrastructure and business institutions, using BMI's proprietary global Business Environment Risk Ratings.

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Testimonials

The sections that I find most interesting and useful are the macroeconomic data and forecasts for the country, top export destinations and economic activity. The indicators/analysis of these areas helps us orient our thinking, our assumptions and, consequently, our decisions in the commercial area.

Country Manager, DHL Express