World Bank Report
In 2020, the impact of the first wave of COVID-19, coupled with macroeconomic volatility maintained Zimbabwe’s recession – despite relative stabilization of prices in the second half of the year.
The pandemic disrupted the movement of people, trade, and capital, and its impacts led to a contraction in Zimbabwe’s Gross Domestic Product (GDP) of eight percent in 2020.
The effects of COVID-19 and expansionary monetary policy further elevated prices during the first half of 2020 when prices were increasing at double-digit rates per month.
While subsequent fiscal and monetary stabilization efforts slowed inflation to single-digit monthly increases, annual average inflation in 2020 of 557 percent was more than double the inflation rate in 2019, further suppressing domestic demand.
In the early part of 2020, interruptions to supply chains and operating restrictions IN 2020, viii adversely affected manufacturing; non-mineral exports; and the hospitality, trade, and transport sectors.
In the latter part of 2020, supply-side shocks subsided after easing of mobility restrictions, however demand-side shocks have persisted throughout the pandemic period.
As these challenges were further aggravated by persistent drought, price instability, and export retention requirements, they ultimately eroded Zimbabwe’s business environment in 2020.
Nevertheless, a significant increase in formal remittances led to an improvement in the current account balance and to some extent cushioned the impact of the pandemic on the poor.