Zimbabwe's Finance Minister announced the rebasing of the economy on Wednesday, following the adoption of a new currency earlier this year, and said growth would be slowed this year by a drought and a cyclone that hit eastern regions. The economy grew higher than expected in 2018, Finance Minister Mthuli Ncube told parliament.
The central bank scrapped the peg between its quasi-currency bond note and electronic dollars against the U.S dollar in February and merged them into a single transitional currency called the RTGS dollar. Rebasing the economy broadly means changing the reference points used to calculate the country's gross domestic product. The southern African nation rebased its economy last October boosting it by 40% to $25.8 billion and Ncube said the adoption of the RTGS$ required another rebasing exercise, which put the economy at RTGS$70.1 billion or $21 billion at the official exchange rate.
Ncube said the economy had grown by 6.2 percent in 2018 compared to an initial forecast of 3.1 percent but he saw growth being throttled this year by "severe economic shocks", including a drought that has wilted crops and a cyclone that hit western parts of Zimbabwe in March. He said Zimbabwe had 876,000 tonnes of maize in strategic grain reserves, enough to feed the country for seven months. Ncube said the national treasury's austerity measures had meant a budget surplus of RTGS$443 million was recorded in the first quarter and added that the target of a budget deficit of 5% of GDP would be achieved this year.
(With inputs from agencies.)