By Bahle Gama
The country’s Gross Domestic Product (GDP) has grown to about E70 billion.
This was revealed by the Minister of Economic Planning and Development Dr Tambo Gina during a press conference on Thursday.
According to the Minister, following the completion of the economic census in 2019, the size of the country’s economy is indicatively higher by E1.5 billion in 2019 relative to previous estimates.
With this rebasing, real GDP is now valued at 2019 prices, moving away from the 2011 prices used previously.
“Preliminary results from the rebasing reflect that real GDP stood at E69.97 billion in 2023,” he said.
This according to Dr Gina represents a growth of 5 per cent compared to 2022.
He stated that based on the preliminary estimates, there is a need to reflect on the medium-term prospects for the country, considering prevailing global and domestic conditions.
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Dr Gina highlighted that global growth as reported by the International Monetary Fund is projected to moderate from 3.3 per cent in 2023 to 3.2 per cent in 2024 and 2025.
“The global economy is battling with the lingering effects of intensifying geopolitical tensions. These triggered supply chain disruptions and elevated global inflationary pressures, thereby heightening economic vulnerabilities for most countries,” said Dr Gina.
Turning to the domestic economy, the Minister noted that GDP growth in 2024 is expected to moderate to 3.6 per cent, a growth slower on account of previous year base effects.
He also brought to attention that 2023 was a year for national elections which induced an increase in spending on goods and services.
On a positive note, he said growth in 2024 will benefit from rebounding manufacturing and agricultural activities, adding that export data for nine months reflect a growth of 13.6 per cent largely attributed to food processing, textiles, and miscellaneous edibles.
“The country’s GDP growth is expected to accelerate strongly in the medium term and average 5.4 per cent with a peak of 8.3 per cent in 2025,” he said.
The Minister elaborated further that the medium-term growth will be largely on account of the construction of the Mpakeni dam under the Mkhondvo-Ngwavuma Water Augmentation Project (MNWAP) valued at E2.7 billion to be implemented for a period of three years.
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Dr Gina acknowledged that with every projection, there are upside and downside risks, and globally these are geopolitical tensions, conflicts, and transactions of political leadership in major economies.
“These risks shape global value chains, commodities prices, and foreign currency movements, all of which can impact the domestic economy,” said Dr Gina.
Also, unfavourable weather conditions arising from climate change remain a major concern, largely affecting output in the agriculture, agro-processing, and hydro-power generation subsectors.
On the domestic front, growth prospects are dependent on the fiscal position and fiscal space to support the implementation of public projects.
The Minister said a faster implementation rate of projects will lead to higher growth trends than reported and the opposite is true.
“Similarly, the financing of private sector projects of implementation can be a major risk on the projected economic growth plan,” he added.