THE International Monetary Fund (IMF) has declined to evaluate Zimbabwe’s Gross Domestic Product outlook this year in its latest World Economic Outlook report as the country’s economy continues to worsen at an alarming rate.
According to the report which projected the GDP outlook of several countries, the IMF said it was not in a position to evaluate the country’s GDP growth this year because of the rate the economy was declining.
The Bretton Woods institute has rated Zimbabwe, whose inflation is at 231 million %, as the world’s fastest shrinking economy.
“IMF declined to evaluate Zimbabwe GDP growth this year,” was as brief as the evaluation of Zimbabwe went.
GDP is the total amount of the country’s production. Due to the economic meltdown, Zimbabwe’s production sector has sunk to its lowest ebb.
The IMF report said world growth would slow down amid the most dangerous financial shock since the 1930s.
“There will be no growth in many advanced economies until at least mid-2009, and global economy expected to stage modest recovery later in 2009.”
On an annual basis, global growth is expected to moderate from 5% in 2007 to 3,9% in 2008 and 3% in 2009,” said IMF.
The IMF last month said it had paved way to work with Zimbabwe’s new power-sharing government but then said the country’s leaders first need to make clear commitments to rescue the economy.
IMF Managing Director Dominique Strauss-Kahn said the signing of the power-sharing accord between President Robert Mugabe and opposition leaders Morgan Tsvangirai and Arthur Mutambara was a chance to reverse the economic crisis, where inflation was now above 200 million %.
“We stand ready to discuss with the new authorities their policies to stabilise the economy, improve social conditions, and reduce poverty,” Strauss-Kahn said in a statement.
But Strauss-Kahn said the new government needed to show it was willing to implement credible policies to put the economy on a sound footing.
“I encourage the government to take steps to show clear commitment to a new policy direction and to seek the support of the international community,” he added.
Such a strategy would also help put Zimbabwe in better standing with the international community and restore ties with the IMF.
Zimbabwe’s GDP has been on a steep decline over the past 10years. Production in agriculture, mining and manufacturing has more than halved since the political crisis started in 2000, and a recent industrial survey shows that manufacturing industry is operating at less than 30% of capacity.
Shops are empty and because of declining foreign currency inflows, the Reserve Bank has “legalised” the use of foreign currency for paying for goods and services.
Zimbabwe is now a highly polarised society economically, with a thin veneer of extremely wealthy entrepreneurs, including government ministers and officials, policemen and military officers and well-connected business people, known generically as “chefs”, enjoying luxurious lifestyles while the rest of the country’s populace live on less than one US dollar per day.
By Paul Nyakazeya