Following the International Monetary Fund (IMF) consultations with the government of Zimbabwe, the Bretton woods institution has projected an economic growth of 3.5% for Zimbabwe this year. The IMF’s executive board noted that the country’s Real Gross Domestic Product (GDP) rose by 6.3% in 2021 supported by bumper maize harvest, strong pickup in mining, and buoyant construction.
IMF noted that since mid-2020, adoption of tighter monetary policies have contained the raging inflation and urged the government to continue with these policies to curtail inflation. The fiscal policy was tightened in 2020-21, resulting in higher revenues resulting in the current account surplus during the 2019-21 period. IMF statement said that It expected the output recovery to continue, at a slower pace leading to a projected growth of 3.5% in 2022 and 3% over the medium term.
The areas of concerns for IMF were high inflation, rising poverty and food insecurity partly due to protracted droughts. Improvement was observed in efforts to restore macroeconomic stability and developing a debt resolution strategy with token payments to creditors. It underlined the importance of fiscal policy to restore macroeconomic stability and create fiscal space for priority spending, the need to enhance revenue mobilisation through expanding the tax base and improving tax administration and compliance. It also recommended increasing the operational independence of the central bank, greater exchange rate flexibility by allowing a more transparent and market-driven price process.
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