Harare - The International Monetary Fund has alluded that further efforts are needed to durably anchor macroeconomic stability and accelerate structural reforms in Zimbabwe.
In a statement issued at the conclusion of the IMF mission visit to Zimbabwe, IMF highlighted that structural reforms aimed at improving the business climate and reducing governance vulnerabilities are key to promoting sustained and inclusive growth.
“Durable macroeconomic stability and structural reforms would bode well for supporting Zimbabwe’s development objectives as embodied in the country’s National Development Strategy 1 (2021-2025),” IMF said.
However, the IMF noted the authorities’ efforts to stabilise the local foreign exchange market and lower inflation and commended the recent tightening of the monetary policy and the contained budget deficits saying they are policies in the right direction as they have contributed to the narrowing of the parallel market exchange rate gap.
IMF further highlighted that Zimbabwe’s economy has shown resilience in the face of significant shocks which include Russia’s war in Ukraine, the poor rainfall, and price pressures which are adversely affecting economic and social conditions in the country.
“Renewed price and exchange rate depreciation pressures emerged, notably in the second quarter of 2022, with inflation in August reaching 285% over a year earlier,” IMF said adding, “After rising to about 7% in 2021, real GDP growth is expected to decline to about 3½% in 2022 reflecting a slowdown in agricultural and energy outputs owing to erratic rains and rising macroeconomic instability, amidst a recovery in mining and tourism.”
According to IMF, uncertainty remains high in Zimbabwe, however, the outlook will depend on the evolution of external shocks the policy stance, and the implementation of inclusive growth-friendly policies.
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