WASHINGTON, Sept 25 (Reuters) – After two years of high
growth Zimbabwe’s economy is set to slow to 5 percent this year
amid a poor farming season blamed on erratic rainfall and
concerns about upcoming elections, the International Monetary
Fund said on Tuesday.
Zimbabwe’s economy grew at a rapid clip of 9.6 percent in
2010 and 9.4 percent last year as the country rebounded from a
decade-long recession widely blamed on the policies of long-time
President Robert Mugabe.
In its annual review of the Zimbabwean economy, the IMF said
growth should moderate over the medium-term to average about 4
percent, although electricity supply problems and tight
liquidity conditions could pose problems.
The IMF said Zimbabwe’s current account deficit is projected
to narrow to 20.5 percent of gross domestic product in 2012, as
a spike in imports in 2011 is reversed and exports continue to
expand.
The IMF said Zimbabwe carries a heavy debt burden with total
external debt estimated at $10.7 billion, or 113.5 percent of
GDP, at end-2011, of which 67 percent of GDP are in arrears.
“The large debt overhang remains a serious impediment to
medium-term fiscal and external sustainability,” the IMF said.
Two salary increases for civil servants since 2011 raised
employment costs by 22 percent, and was compounded by an
increase in employee allowances and unbudgeted recruitment.
With elections expected later this year or next, there are
concerns about a repeat of violence that marred the 2008
presidential poll. Mugabe, 88, has held onto power since
independence from Britain in 1980 and is blamed for running the
economy into the ground and for massive human rights abuses.
The West has imposed sanctions on Mugabe and his allies,
accusing them of election violence and using state security
agents to beat up and detain opponents.
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