HARARE – Zimbabwe is expected to register moderate growth in the short term and the country could be vulnerable to weakening exports, the International Monetary Fund said on Thursday.
The southern African country’s economy rebounded sharply to grow by double-digit figures between 2010 and 2012 after a decade of contraction which was marked by acute foreign currency shortages and hyper-inflation of 500 billion percent.
But it only grew 3.2 percent in 2013 after expanding at a brisk 10.5 percent the previous year and subdued growth is seen this year again.
“The macroeconomic environment is expected to remain challenging in 2014, and the outlook is for continued moderate growth,” the IMF said in a statement after its team ended a two-week visit to Zimbabwe.
The IMF last June put Zimbabwe on a monitoring programme aimed at helping it clear $10 billion in external debts that would give it access to much-needed credit.
International lenders stopped supporting Zimbabwe in 1999 when the country started defaulting on its debt, which is estimated at over $10 billion.
Under the IMF staff programme, Zimbabwe pledged to improve transparency in mining, strengthen the banking sector and contain a wage bill that takes 70 percent of the national budget, but has missed all the targets so far.
On Wednesday, Finance Minister Patrick Chinamasa said Harare was not prepared to slash its public sector wage bill because it will involve too many job cuts.
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The IMF said Zimbabwe faced risks from the possibility of weak export sales and tougher conditions in accessing external financing. Exports declined to $3.5 billion last year from $3.9 billion in 2012.
“Should these risks materialize, they would adversely impact output growth and fiscal revenue. Achieving Zimbabwe’s fuller growth potential over the medium term depends on pursuing strong macroeconomic policies,” the IMF said.
– Reuters
