Economy on path to recovery – IMF

imfHARARE - The International Monetary Fund (IMF) has projected a 3 per cent growth of the economy by year-end and attributed this growth to the efforts by government through the finance ministry.

The economy has begun to recover in 2009, albeit from a low base. Since early 2009, the government has broadly adhered to cash budgeting, achieved a significant improvement in budget revenue, established a multi-currency system, and largely liberalised prices and the exchange system. As a result of these improved policies, real GDP is projected to grow by about 3 per cent,” said head of delegation, Vitaliy Kramarenko, in a statement on the mission.??

Finance Minister Tendai Biti has tabled before parliament the Reserve Bank Amendment Bill which seeks to define the functions of the RBZ and roles of the central bank governor. Zimbabwes economy had deteriorated to catastrophic levels in 2008 following Gonos quasi-fiscal activities which seriously haemorrhaged the economy. There is need however to put this law in place with urgency so as to avoid clashes between the finance minister and the RBZ governor which observers and economists say are counter-productive. ??

The IMF team, which was in the country to review progress in the implementation of the Short-Term Economic Recovery Programme (STERP) and assist in the preparation of the draft 2010 budget and the underlying macro-economic framework, held meetings with Minister Biti, Economic Planning and Investment Promotion Minister Elton Mangoma, Dr Gono, and other senior Government officials.??

It also met with representatives of the financial, business, and diplomatic communities.?? As part of its recommendations, the IMF underscored the need for comprehensive tax reforms in the country to boost the overall revenue performance of the fiscus.?? “The key challenge going forward is to build the necessary support for policies that would ensure sustainability of the nascent economic recovery and improvements in living conditions for Zimbabweans,” said Kramarenko.??

IMF said it would continue to provide policy advice and targeted technical assistance to Zimbabwe as the relations between the country and the money lending institution were thawing.

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