IMF warns Zimbabwe on slowing growth
THE International Monetary Fund (IMF) on Wednesday warned of the risks associated with Zimbabwe’s slowing economic growth rate now pegged 1,5 percent, down from 3,2 percent.
Although the country was on course to meet set targets under IMF’s Staff Monitored Programme, the IMF’s resident representative Christian Beddies, said while the country had revised downwards its economic growth for 2015, there were still risks that the target might not be achieved.
He said the achievement of this target will depend on economic and political developments that will happen up to December.
“The risks are related to obviously mining, we have to see how the rest of the year is going, then the winter season in terms of agriculture, we do not yet know exactly know how it was, the liquidity situation, access to credit, these are all sorts of reforms government is trying to tackle, but obviously some of these things will take more time,” Beddies said.
IMF says it will assess the macro-economic conditions in Zimbabwe and review its growth projections for this year, which it estimated at 2,8 percent after the first review in April, and beyond.
He said the situation remains challenging and difficult, rendering it almost impossible to achieve the growth rate the country had envisaged in April.
“The agriculture season has not been good. There are some mitigating factors in terms of gold mining for example, has been better than expected, but overall it is very unlikely,” he said.
In terms of reforms, he said the Staff Monitored Programme (SMP) remains on track.
“The Minister (of Finance Patrick Chinamasa) has announced a couple of measures in his Mid Term Fiscal Review (to achieve these reforms). The country was making monthly payments of US$150 000 to the IMF to settle its US$111 million arrears,” he said.
The Zimbabwe govt is making regular payments to the IMF; token payments which are an important ingredient to finding a solution to the arrears.
An IMF mission is expected in the country next week from August 31 to September 11 to conduct the second review under the 15-month SMP, an informal agreement between the government and IMF staff to monitor the implementation of its economic reforms.