Essays on Economic of Zimbabwe Case Study

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The paper "Economic of Zimbabwe" is a perfect example of a micro and macroeconomic case study.   Zimbabwe’ s economy has been growing despite continuing political uncertainty. Following many years of contraction from 1997 to 2009, the country’ s economy was reported to have recorded real growth of roughly 10 per cent in 2010/2011, before slowing in 2012/2013 due to low diamond revenues and poor crop harvest (Christiano, 2008). Zimbabwe faces numerous difficult economic problems, including regulatory deficiencies and infrastructure, policy uncertainty, ongoing indigenization pressure, insufficient formal employment, a large external debt burden, and so forth.

Until late 2008, Zimbabwe Reserve Bank routinely printed money to fund the budget deficit, causing massive hyperinflation (Christiano, 2008). Dollarization in early 2009 reduced inflation below ten per cent per year and also ended hyperinflation (Wines, 2010), but Zimbabwe was exposed to the structural weakness that has continued to inhibit economic growth. Introduction The Zimbabwe economy shrunk badly after 2000, resulting in a desperate situation for the county, an 80 per cent unemployment rate and widespread poverty (Majaka, 2014). The country participation from 1997 to 2002 in the civil war in the DRC set the stage for this deterioration by draining the public coffer of hundreds of millions of dollars (Croft, 2009).

Hyperinflation has been a major problem for the country since 2003 when Zimbabwe suspended its own currency (Christiano, 2008). Zimbabwe’ s economy is still in a fragile state, with massive deindustrialization and an unsustainably high external debt and in formalization (Wines, 2010). The country’ s average GDP growth rate of 7.5 per cent during the economic rebound of 2009-2012 is moderating (Majaka, 2014). This economic slowdown has been contributed by the liquidity challenges (such as revenue underperformance and so forth), structural bottlenecks, outdated technologies, infrastructure deficits, power shortages, corruption and a fragile and volatile global financial environment (Christiano, 2008).

References

Croft, Adrian (September 26, 2009). "Zimbabwe should seek HIPC debt relief, minister says".

Reuters.

Majaka, Ndakaziva (20 May 2014). "Zimbabwe’s economic collapse alarms business". Daily

News Live. Retrieved 21 May 2014.

Christiano, Lawrence (February 2008). "Cagan's Model of Hyperinflation Under Rational

Expectations". International Economic Review 28 (1)

Wines, Michael (7 February 2007). "As Inflation Soars, Zimbabwe Economy Plunges". The New York Times. Retrieved 4 May 2010.

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