Zimbabwe to Expand at Rate Matching 6-Year Low, IMF SaysGodfrey Marawanyika
Zimbabwe’s economy is expected to expand by “slightly below 3 percent” this year, about matching the lowest level in the last six years, Christian Beddies, the International Monetary Fund’s resident representative in the country said.
Beddies declined to give more detail in an e-mailed response to questions on Tuesday. The estimate is below the 3.2 percent forecast by the government and about matches the 3 percent rate the economy grew at in 2013, according to IMF data.
While the economy grew at 4.2 percent last year, and at a rate of between 8.2 percent and 12 percent between 2009 and 2012, growth is now slowing as demands for increased local ownership deter investment in the mining industry and the government struggles to meet the cost of paying salaries for 230,000 state workers. Salaries account for about 88 percent of the national budget.
The government needs to cut spending on salaries and restore confidence in its financial industry, Domenico Fanizza, head of the IMF’s Staff Monitored Program for Zimbabwe, told reporters in the capital, Harare, on Monday.
Zimbabwe’s economy shrank by about 40 percent between 2000 and 2008 after the government evicted most of the country’s 3,500 white commercial farmers as part of a program to distribute land to black subsistence farmers.
That slashed exports of crops ranging from from tobacco and paprika to roses.