INTELLIGENT Business Technologies chief executive officer Gladys Shumbambiri says the insurance industry can expand its value proposition and enhance its resilience in the face of economic and environmental challenges.
The 2025 economic outlook presents a challenging environment owing mostly to currency volatility, commodity price uncertainty, rising power and water shortages, declining infrastructure, soaring public debt, decreasing consumer spending and growing unemployment.
However, opportunities are also present as the agriculture sector is expected to recover from this year's drought and commodity prices are set to stabilise.
For 2024, some of the aforementioned challenges led the Treasury to project economic growth of 2% this year, down 1,5 percentage points from the initial projection.
For next year, however, the Treasury is more optimistic projecting a growth of 6%.
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Speaking on Sunday, during the interactions at the Insurance Institute of Zimbabwe Annual Conference in Victoria Falls, Shumbambiri said emerging trends were coming out of economic challenges.
“By embracing these trends and focusing on customer-centric ecosystems, the insurance industry in Zimbabwe can expand its value proposition and enhance its resilience in the face of economic and environmental challenges,” she said.
“The Zimbabwe Gold currency is expected to remain volatile, but ongoing efforts to stabilise monetary policy could bring some relief, provided that fiscal discipline is maintained.
“Despite, the recent exchange rate and inflationary pressures in the economy, the Reserve Bank expects month-on-month inflation to correct and dissipate to below 5% by end of year 2024, and below 1% for the rest of 2025.”
The executive said the central bank should in 2025 contain reserve money growth to economic growth enhancing levels by around 15% to 20% per annum, considering the projected growth rate of 6% and the need to maintain monthly inflation at around 1%.
Reflecting on the high increase of month-on-month inflation in October to 37,2% from 5,8% in the prior month, Shumbambiri said the annual inflation rate in 2025 would be elevated until September.
However, she expects the inflation rate to stabilise in the last quarter of the year.
“The insurance industry, a critical player in risk management and financial stability, is evolving in response to these macroeconomic trends,” Shumbambiri said.
