Structural reforms bode well for Zim:IMF


BUSINESS REPORTER

The International Monetary Fund (IMF) says further efforts are needed in Zimbabwe  to solidify the stabilisation trends and accelerate reforms.

The IMF team led by Dhaneshwar conducted a virtual visit with Zimbabwe authorities from June 1 to 15.

Finance Minister Mthuli Ncube

In its report after the conclusion of the virtual mission visit, IMF lauded Zimbabwe’s efforts to contain budget deficits and reserve money growth, as well as the introduction of a foreign exchange auction system saying the policy measures were in the right direction for the economy.

It noted Zimbabwe’s  efforts to stabilise the local currency and lower inflation.

“The near-term macroeconomic imperative is to improve the coordination among fiscal, foreign exchange and monetary policies, while addressing Covid-19-related economic and humanitarian challenges,” it said.

IMF said structural reforms aimed at improving the business climate and reducing governance vulnerabilities were essential in ensuring sustained and inclusive growth.

It said Zimbabwe’s strategy and policies as embodied in their National Development Strategy need to be fully operationalised and implemented.

“Durable macroeconomic stability and structural reforms would bode well for the recovery and Zimbabwe’s development objectives,” IMF said.

It said Zimbabwe has shown resilience in the face of the Covid-19 pandemic and other exogenous shocks.

The pandemic, on top of Cyclone Idai in 2019, a protracted drought, and weak policy buffers, has taken a severe toll on the economic and humanitarian situation, it said.

IMF said the economy was expected to rebound this year by 6% on the back of a good agricultural season, increased energy production and the resumption of greater manufacturing and construction activities.

“Uncertainty remains high, however, and the outlook will depend on the pandemic’s evolution, the pace of vaccination and implementation of sustainable policies,” IMF said.

The IMF staff held meetings with Finance minister Mthuli Ncube, Reserve Bank of Zimbabwe Governor John Mangudya, other senior government and RBZ officials, representatives of the private sector and Zimbabwe’s development partners.

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