International Monetary Fund chiefs on Monday blamed Zimbabwe’s government for pursuing ”inappropriate policies” that plunged the country into a steep downward spiral.
Zimbabwe’s voting rights at the Fund were suspended on June 6 because it had failed to pay IMF dues amounting to about $233-million by the end of May.
The country’s total output, or gross domestic product, plummeted an estimated 8,8% in 2001 and crashed another 12,8% in 2002, IMF staff said.
Consumer price inflation, meanwhile, leapt from 112,1% in 2001 to 198,9% in 2002.
”Unemployment and poverty have risen sharply and the HIV/Aids pandemic is worsening, and Zimbabwe’s economic problems have had repercussions in neighboring countries,” the Fund said in an annual review of the country’s economy.
”Directors observed that this sharp deterioration primarily reflects the government’s inappropriate macroeconomic and structural policies, in particular loose financial policies and increased regulation and government intervention,” it said.
”Moreover, the government’s land reform programme, compounded by inclement weather, has resulted in a significant reduction in agricultural output and a lowering of the sector’s medium-term potential.”
The IMF urged Zimbabwe to arrest the economic decline, curb inflation and restore growth.
”Decisive steps to restore confidence in the government’s economic policies, including enhanced governance and transparency and respect for the rule of law, and broad ownership of the reform process, will be key to revamping productive investment, attracting needed foreign direct investment, and regaining the support of foreign creditors and donors,” it said. – Sapa-AFP