HARARE - The International Monetary Fund (IMF) has slashed Zimbabwe’s economic growth forecast to 1,4 percent this year against Finance minister Patrick Chinamasa’s 2,7 percent growth target.
An IMF official leading a delegation from the Bretton Woods Institution — currently in the country to assess economic reform progress — Domenico Fanizza on Tuesday told the businessdaily in an exclusive interview that the new figure took into account an impending drought and unstable metal prices.
“We have agreed on different numbers, now it is going to be much lower . . . I think we have I,4 percent as this year’s growth projection . . . ,” he said.
Finance minister Chinamasa yesterday agreed that the country’s growth targets will be lower than anticipated due to harsh weather conditions.
“The drought will obviously affect our growth . . . ,” he said without elaborating.
The latest development comes after the World Bank recently revised Zimbabwe’s growth projection figure to 1,5 percent due to the country’s worsening economic conditions.
Zimbabwe has failed to register significant economic growth since the controversial 2013 elections that saw President Robert Mugabe extending his iron rule on the country, as the country hurtles towards a recession.
Deflation has taken root as consumer demand shrinks and the economy struggles with a shortage of dollars.
Once bustling factories in Harare are now rusty shells, devastated by the 1999-2008 recession that cut gross domestic product by about half.
In addition, the mines are reeling from the fall in commodity prices and a drought has left 16 percent of the population needing food aid.
Formal unemployment stands at more than 80 percent and power shortages are getting worse.
Ranked as one of the poorest countries in Africa — despite possessing vast amounts of natural resources such as diamonds, gold, platinum and copper among others — critics blame Zimbabwe’s economic malaise on the country’s leadership which has been in power since independence in 1980.
The country, which has not received financial support from the IMF, World Bank and African Development Bank since 1999 due to its failure to pay arrears, is currently working on a cocktail of economic strategies geared at clearing its combined $1,8 billion in arrears owed the financial institutions.
Meanwhile, the Fanizza-led IMF mission in its assessment under 20016 Article IV Consultations and the review of a 15-month Staff-Monitored Programme concluded that the economic difficulties in Zimbabwe had deepened.
“Zimbabwe cannot wait and needs to act now. The El Nino-induced drought has hit the economy hard.
“Lower commodity prices and the appreciation of the US dollar have compounded difficulties. Policy action is needed to reverse this adverse trend,” Fanizza said.