Business Monitor International


Zimbabwe Business Forecast Report

Published 26 February 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:

  • A spate of revelations about corruption and mismanagement at Zimbabwean state-owned enterprises by state media has been applauded, but has also raised the ire of the general public, given the magnitude of some of the figures involved. Questions have been raised about why this problem, which has more or less been public knowledge for some time, is being publicly aired now. While an attempt to free up fiscal resources is probably a factor, it also appears that a battle to succeed ageing President Robert Mugabe at the helm of the ZANU-PF party is playing a part.

  • Although we think that remittance flows are larger - and therefore that the current account deficit is smaller - than official data suggest, we nonetheless believe Zimbabwe's external accounts will remain precarious. The trade deficit will remain wide and although current transfers will go some way to offsetting this, long-term sustainability will be difficult to achieve until the authorities are abl e to attract foreign investment .

  • We retain our view that the Zimbabwean economy will expand by 3.5% in 2014 as a liquidity crunch will weigh on investment, government spending and net exports. Although it appears that private consumption slowed in 2013, we believe that this component of GDP will accelerate in 2014. There are significant upside and downside risks to our forecasts.

Major Forecast Changes:

  • No major forecast changes

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...

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
Succession And Economic Challenges Lead To Anti-Corruption Drive
8
TABLE: POLITICAL OVERVIEW
8
Long-Term Political Outlook
10
Mugabe's New Term's Key Challenges
10
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Ratings
13
Economic Activity
14
Lack Of Investment To Weigh On Economic Growth
14
TABLE: ECONOMIC ACTIVITY
14
Balance Of Payments
15
External Accounts To Remain Weak Despite Remittance Support
15
TABLE: CURRENT ACCOUNT
16
Monetary Policy
18
New Era, Old Challenges For Central Bank
18
TABLE: MONETARY POLICY
18
Fiscal Policy
19
Budget: Initial Thoughts
19
Chapter 3: 10-Year Forecast
21
The Zimbabwean Economy to 2023
21
Policy Risks To Constrain Long-Term GDP Growth
21
table : Long -Term Macroeconomic 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 (US$mn )
30
Chapter 5: BMI Global Assumptions
31
Global Outlook
31
Fairly Benign Prognosis
31
Table : Global Assumptions
31
Table : Developed States , Real GDP Growt H, %
32
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
32
Table : Emerging Markets , Real 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