HARARE: Zimbabwe’s economic prospects remain difficult and are set to worsen by the end of this year, the International Monetary Fund (IMF) warned on Thursday. In a statement following the completion of the first review of the IMF Staff-Monitored Programme (SMP) for Zimbabwe, the Bretton Woods institution said economic growth for the southern African country has slowed in recent months “and is expected to weaken further in 2015.”
“Despite the favourable impact of lower oil prices, the external position remains precarious and the country is in debt distress,” the Fund said.
It cited key risk factors for the bleak outlook as the anticipated further decline in global commodity prices, fiscal challenges currently faced by the Zimbabwean government as well as difficulties in policy implementation.
The Fund however noted that the Zimbabwean authorities “are committed to intensifying their efforts to ensure successful implementation of the programme and to lay the ground for stronger, more inclusive, and lasting economic growth.”
The 15-month SMP approved in October 2014 constitutes the lynchpin of the Zimbabwean government’s roadmap for building a strong track record towards normalizing the relationship with its creditors and mobilizing development partners’ support.
The main objective of the programme is to strengthen Zimbabwe’s external position as a prerequisite towards arrears clearance, normalization of debt servicing, and restoring access to external financing.
The country owes more than US$600 million in debt arrears to the IMF, World Bank and the African Development Bank.
