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IMF Forecasts Zim GDP Slip

FILE: A currency trader holds worthless Zimbabwean dollar notes on the streets of Harare, Zimbabwe, Thursday, June, 9, 2022. Since the start of Russia’s war in Ukraine, official statistics show that Zimbabwe’s inflation rate has shot up from 66% to more than 130%.

Zimbabwe's real GDP growth is expected to slow to about 3.5% in 2022 from 8.5% last year, the International Monetary Fund said on Thursday as it concluded its mission to Harare.

The IMF said multiple shocks such as a surge in inflation, erratic rainfall and electricity shortages will continue to weigh on Zimbabwe’s growth prospects.

"The IMF mission notes the authorities' efforts to stabilize the local foreign exchange market and lower inflation," it said, pointing to the swift tightening of monetary policy along with greater official exchange rate flexibility and a prudent fiscal stance.

Uncertainty remains high, however, and the economic outlook will depend on the implementation of key policies and the evolution of external shocks, the IMF said.

Zimbabwe, which has suffered bouts of hyperinflation in the past 15 years, has more than $10 billion in external debt, mostly in arrears. It has not received funding from lenders like the IMF and World Bank for more than two decades as a result.

Zimbabwe is engaging with the World Bank and IMF over how to clear its debts with international financial institutions, finance minister Mthuli Ncube said in October.