IMF: Zimbabwe faces severe outlook

Sept. 17, 2004 at 4:39 PM
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WASHINGTON, Sept. 17 (UPI) -- Zimbabwe's economy is declining sharply and faces famine as well as a high HIV-infection rate, the International Monetary Fund said Friday.

The IMF said the economic downturn was largely due to mismanagement of finances and a disorderly implementation of fast-track land reform. In order to stem further decline, the agency called for the government to keep a firm lid on non-essential spending on the one hand while protecting its social structure and infrastructure on the other.

But the IMF warned that the sharp economic decline, coupled with high inflation, is leading to a surge in unemployment and a decline in the well-being of its people. Zimbabwe is currently suffering from a "cycle of malnourishment and disease," as well as a slump in agricultural production that has led to continued food insecurity.

Meanwhile, Zimbabwe is also struggling from the fact that one in four adults is now infected with the HIV/AIDS virus.

The IMF said that reducing inflation should be Zimbabwe's main priority from a monetary perspective, and stressed "the urgent need to contain the growth of credit, in particular, credit at preferential, non-market interest rates, and to improve short-term liquidity management."

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