Z’bawe’s growth forecast revised down as IMF monitors situation

THE International Monetary Fund (IMF) yesterday lowered Zimbabwe’s growth forecast for this year to 1.5% from 2.8%, blaming drought and lower commodity exports.

The country has been struggling for five years to recover from a catastrophic recession that was marked by a billion percent hyperinflation and widespread food shortages.

Domenico Fanizza, who is leading an IMF mission that is reviewing Zimbabwe’s progress under an IMF staff monitoring programme, said a drought this year had caused a significant slowdown in economic activity.

He said the lower growth forecast of 1.5% was a cautious assumption.

“Moreover, the international environment is becoming increasingly dif- ficult, with low prices for Zimbabwean commodity exports, and those are the main reasons for the revision downwards,” Fanizza said.

More than half of Zimbabwe’s exports come from the mining sector, while tobacco sales – its single largest export earner – could be hurt by the slowdown in China, its major market.

Fanizza said the IMF staff programme was meant to repair strained relations between Zimbabwe and international lenders and could eventually open the door for new funding.

Zimbabwe defaulted on its loans to the IMF, World Bank, African Development Bank and several Western creditors in 1999 and has accumulated a debt of $9-billion (R123.2-billion).

Targets set include cutting the government wage bill and reducing external borrowing. – Reuters