ZIM ECONOMY EXPECTED TO WEAKEN FURTHER

ZIMBABWE’S economy is expected to weaken further this year after growing by 3.1 percent in 2014, the International Monetary Fund said on Monday, while the country’s finance minister said Harare expects to clear its arrears to the fund in the next year.


The government forecasts growth this year of 3.2 percent, but analysts say weak commodity prices, patchy rainfall this season and company closures as a result of cheap imports and high interest rates will curtail the economy’s growth.

The country’s foreign debt is $9 billion. Harare makes token monthly payments of $150,000 to clear $125 million in IMF arrears.

The fund says the government can only gain access to new finance if it clears the arrears and presents a credible plan to clear outstanding payments to foreign creditors.

Foreign investors often point to the government’s policy of forcing foreign-owned firms to sell a majority of shares to locals as an impediment to investment

The IMF  said Zimbabwe should show a commitment to clearing its accumulative debt if the country is serious about re-engaging with the international financial community.

Harare’s external debt, at $10 billion, continues to block access to fresh funding and government feels its resolution would bring the economy on the growth path.

The country owes the IMF and the World Bank $124 million and $1 billion respectively.

 The debt is prohibiting the country from accessing funds which are needed for economic and infrastructure development.

However,  Finance and Economic Planning Minister, Patrick Chinamasa, tells parliament he will ask the International Monetary Fund and other international financial institutions to provide new money to Zimbabwe so that it can clear its external debt and move forward.ZimSitRep_J —

He said Zimbabwe must restore international confidence in the economy, adding that this could only be achieved if Zimbabweans stopped bad-mouthing their country abroad.But he explains that government must also develop a culture of paying its debts.

Chinamasa said the government wants to engage many nations regardless of political differences between Zimbabwe and western countries.

He said it’s surprising some Zimbabweans insist there are no sanctions when countries that imposed them admit their existence and have told him reasons why they won’t remove the measures.
 www.New Zimbabwe.com