IMF warns on Zimbabwe economy

IMF warns on Zimbabwe economy

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By Staff Reporter

THE International Monetary Fund, which is weighing whether to expel Zimbabwe for being behind on payments to the lending institution, raised concerns about deterioration in the country's economic climate.

IMF policy-makers, in a report released Tuesday, expressed "deep concern over the continued sharp economic and social decline in Zimbabwe, with prospects of continued triple-digit inflation, further output declines and increased poverty."

Citing a United Nations report, the IMF said Zimbabwe President Robert Mugabe's recent drive to remove people from unauthorized dwellings - dubbed Operation Restore Order - has left some 700,000 people across the country either homeless or without any source of livelihood, or both.

Some 2.4 million others are being "indirectly affected in varying degrees," although specifics were not provided.

"Food security is also an urgent concern give the drought and the slow progress in mobilizing food assistance," the IMF said.

The assessment is part of ongoing economic evaluations of countries conducted by the 184-nation IMF, which seeks to keep a pulse on the world economy.

The IMF's executive board last month deferred a decision on whether to expel Zimbabwe, saying it would revisit the issue in six months.

The last country to get expelled by the IMF was Czechoslovakia in 1954.

Zimbabwe in late August paid the fund $120 million and a further $15 million in October to reduce its arrears to the fund, which still stand at about $160 million, the IMF said.

The IMF's directors "called for strengthened cooperation with the fund, including a satisfactory track record on payments and timely disclosure of information," the IMF said in the report.

The report said that IMF's directors welcomed Zimbabwe's $120 million payment, although "a number of directors sought clarification regarding the source of the funds for this payment."

The IMF halted aid to Zimbabwe in 1999 and suspended the southern African nation's voting rights in 2003.
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