Zimbabwe’s real gross domestic product contracted by about 30% while poverty levels have doubled over the past five years, the International Monetary Fund (IMF) said on Wednesday.
School enrolment has also fallen by 35%, the IMF concluded as it wound up its two week-long annual routine visit to Zimbabwe.
The economy’s sharp contraction was reflected in real GDP which ”declined by about 30%, and was still contracting,” the IMF said in a statement, issued in Harare.
”Inflation doubled each of the last three years to reach 600% at the end of 2003,” it added.
Unemployment, estimated at 70%, has been rising as ”poverty has doubled since 1995, school enrolment declined to 65% in 2003”.
The international lender — which supported Zimbabwe for many years until 1998 when it froze its aid due to disagreements with Harare — said ”economic policies have not adequately addressed these difficulties”, which include the HIV/Aids pandemic.
It however commended authorities for the new monetary policy announced in December last year, urging that it should consistently focus on taming inflation and reducing pressure on the exchange rate.
For several years Zimbabwe had fixed the official foreign currency exchange to artificial rates that gave rise to the proliferation of a parallel market where most business was conducted.
This year however it introduced a foreign exchange auction where the rates between the official and the black market rates were slowly edging closer to each other.
”While the economic decline in part reflected exogenous shocks, such as inclement weather, the structural changes in agriculture related to the way in which the land reform was implemented negatively affected agricultural production,” said the IMF.
The seven-strong IMF research team, led by Doris Ross, was visiting the embattled country to assess the economic situation, following moves last year by the fund to expel Zimbabwe for unpaid debt and lack of cooperation.
As it concluded its visit, Zimbabwe had re-paid six million US dollars of the $290-million it owed the Bretton Woods institute.
The IMF said Zimbabwe has made a commitment to make small repayments of $1,5-million dollars every month in a bid to clear off the overdue amount.
The IMF, which met a cross-section of people including government, business, labour, political parties and the civic society, said it will review Zimbabwe’s situation in July. – Sapa-AFP