The Impact of Inflation on Economic Growth in Zimbabwe · Electronic Theses and Dissertations

Author

Chitorera, Chantelle

Title

The Impact of Inflation on Economic Growth in Zimbabwe

Abstract

This research study aimed to examine the impact of inflation on economic growth in
Zimbabwe from 2005 to 2020, using Ordinary least squares (OLS) regression analysis.
The study also considered other variables such as government expenditure, debt service,
and unemployment. The research sample consisted of macroeconomic data World
development indicators. The results of the study indicated that inflation had a significant
negative impact on economic growth in Zimbabwe. Specifically, it was found that
increasing inflation rates had a detrimental effect on the country's economic growth. The
study also revealed that inflation coefficient is negative and statistically significant, this
implies that inflation has a negative impact on economic growth in Zimbabwe. Based on
these findings, several recommendations were made to mitigate the negative impact of
inflation on economic growth in Zimbabwe. Firstly, inflation control measures should be
implemented to stabilize the economy. Secondly, fiscal policy management should be
improved to ensure more effective management of government expenditure and debt
service. Thirdly, economic diversification should be promoted to reduce the country's
reliance on a few sectors and increase overall economic resilience. Finally, institutional
strengthening should be prioritized to enhance the capacity of institutions to effectively
manage the country's economic affairs. This study provides evidence of the negative
impact of inflation on economic growth in Zimbabwe, highlighting the need for policy
measures to address the issue. It also emphasizes the importance of considering multiple
factors that influence economic growth, such as government expenditure, debt service,
and unemployment. The findings of this study have important implications for
policymakers and researchers interested in the economic development of Zimbabwe and
other developing countries facing similar challenges.

Date

2023

Publisher

BUSE

Keywords

Inflation

Supervisor

Dr Damiyano