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IMF predicts surge in Zimbabwe’s GDP

Godfrey Marawanyika

FOR the first time in four years the World Economic Outlook Report is predicting a positive gross domestic product (GDP) for Zimbabwe in 2005.

, Arial, Helvetica, sans-serif”>The report is compiled by the International Monetary Fund (IMF) and the prediction came after the group’s analysis of Zimbabwe’s monetary and fiscal policy, which was reviewed last month. The IMF was in Zimbabwe in March conducting its annual Article IV Consultations.

GDP is the total amount of the country’s production.

The report anticipates that Zimbabwe’s GDP, which has been on the decline since 1999, will record a 5,2% positive growth, up from a decline of -9,2% this year. Since March the IMF has warned that this year GDP could shrink even further.

Over the past five years, the country’s GDP has contracted by about 30%.

The outlook however raised concern over the issues of excessive liquidity growth, which contributed to the record increases in stock prices, real estate and the parallel market exchange rate.

The IMF also noted that exports suffered because of the un-competitive official exchange rate and official imports were severely constrained.

Although the IMF raised some concerns, it said it was satisfied with some of the steps taken in the 2004 budget, the December monetary policy statement and efforts to strengthen banking supervision.

The IMF team, which was led by Doris Ross, will present its findings to the executive board sometime next month or early July.

Since 1999, up until December last year, Zimbabwe has been failing to pay its dues to the IMF and other multilateral donors.

As of March 31 Zimbabwe owed the IMF Special Drawing Rights (SDR) 196,71 million. Zimbabwe has committed to make US$1,5 million quarterly payments to the IMF.

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