Harare - Zimbabwe's economy will grow at 1.5% this year and consumer prices will remain deflationary as global and local constraints limit a recovery, the World Bank says.
The global lender said growth this year would be slower than the government's estimate of 2.7%, while inflation in the same year would average -1.7%.
World Bank senior economist for Zimbabwe, Johannes Herderschee, said during a presentation of the bank's outlook on Zimbabwe: "We expect deflation to continue this year".
The Southern African country is experiencing crippling power cuts, blamed for keeping away potential investors in an economy struggling to emerge from a steep recession between 1999-2008 that saw the economy contract by nearly half.
"The fundamentals for recovery are still strong but the headwinds are increasing. These headwinds, as well as the brunt of economic corrections, both domestic and global, will likely be most deeply felt by the poor," the World Bank said.
Zimbabwe however expects gold output to rise by 28% this year, while the government also plans to cut the royalty fee on bullion by 40%, among a host of government efforts to boost growth.
Finance Minister Patrick Chinamasa in December blamed deflation on weak consumer demand and an influx of cheaper goods from South Africa.
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