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Zimbabwe needs bold reforms says IMF

Staff writer ▼ | May 7, 2016
The International Monetary Fund (IMF) has urged bold reforms to revive Zimbabwe’s economy after drought cut agricultural production and disrupted hydropower generation.
IMF Zimbabwe
Africa   Weak commodity prices and policy implementation
The southern African nation is facing risks to the already difficult economic outlook mainly from the prolonged adverse weather conditions, weak commodity prices and policy implementation in a difficult political environment, the IMF said in a statement after a board meeting.

“Zimbabwe’s economic difficulties have deepened. Drought, erratic rains, and increasing temperatures, have reduced agricultural output and disrupted hydropower production and water supplies.”

The statement followed the 2016 Article IV Consultation with Zimbabwe and third review under the Staff Monitored Programme.

It said economic activity is severely constrained by tight liquidity conditions resulting from limited external inflows and lower commodity prices.

“Inflation remains in negative territory, because of the appreciating U.S. dollar—the country’s main currency—and lower commodity prices. Zimbabwe remains in debt distress and the level of international reserves is low,” said the IMF.

“Unless the country takes bold reforms, the economic difficulties will continue in medium-term.

Given the outlook for the global economy, growth is projected to remain below levels needed to ensure sustainable development and poverty reduction.

The current account deficit is expected to narrow, but remain high over the medium term, financed mainly by loans to the private sector.”