Zimbabwe's Economic Growth To Weaken Significantly This Year: IMF

Zimbabwe's Economic Growth To Weaken Significantly This Year: IMF


Zimbabwe's economic growth is set to slow sharply this year, following two years of high growth, as adverse weather and tight liquidity conditions continue to drag economic activity, a report from the International Monetary Fund (IMF) revealed Wednesday.
In its annual review report on Zimbabwe, the IMF said that economic growth is expected to slow sharply to 5 percent this year from 9.5 percent in 2011, reflecting the impact of adverse weather conditions on agriculture, erratic electricity supply, and tight liquidity conditions.
The medium-term outlook, under an unchanged policy scenario, is for growth to moderate to average some 4 percent, although constraints on energy supply and weak competitiveness may pose a challenge to achieving it. Foreign investment is likely to be hampered by a poor business climate, uncertainties over the implementation of the indigenization policy and political instability, the report said.
The current account deficit is expected to moderate this year helped by a marked growth in exports, and is seen narrowing to 20.5 percent of GDP after jumping to 36 percent last year on a surge in trade shortfall.
The IMF, meanwhile, cautioned that the uncertain political situation ahead of elections, and a difficult global environment will pose further risks to the country's economic outlook.
In order to achieve sustained and inclusive growth, the government should be fully committed to implementing policies focused on strengthening fiscal management, reducing financial sector vulnerabilities, and improving the business climate, the report said.