Statement at the Conclusion of an IMF Staff Mission to Zimbabwe

Press Release No. 09/249
July 2, 2009

At the request of Zimbabwe's authorities, an International Monetary Fund (IMF) staff mission led by Vitaliy Kramarenko visited Harare during June 22–30, 2009 to review progress in implementing the government’s Short-Term Emergency Recovery Program, and to discuss the forthcoming mid-year revision of the 2009 budget and the underlying macroeconomic outlook. IMF staff met with Prime Minister Morgan Tsvangirai, Finance Minister Tendai Biti, Reserve Bank of Zimbabwe Governor Gideon Gono, and other senior officials, as well as representatives of the financial, business, and diplomatic communities.

Mr. Vitaliy Kramarenko, IMF Mission Chief for Zimbabwe issued the following statement today in Harare:

As a result of improvements in macroeconomic policies, a nascent economic recovery appears to be underway. A more liberal economic environment, price stability, a deepening in financial intermediation, and increased access to foreign credit lines underpinned a pickup in economic activity. The public finances benefited from the recovery in economic activity and consumption. The government matched expenditure to revenue during January-May 2009; and significant increases in budget revenue in recent months have made it possible to start implementing nonwage expenditures in critically important social areas.

To sustain positive economic trends and improve living standards, reform and stabilization efforts need to be stepped up. In particular, the authorities would need to create sufficient fiscal space for nonwage expenditures in social spheres and critical infrastructure, establish workable coordination mechanisms for attracting direct donor financing of priority social programs, improve Reserve Bank of Zimbabwe governance, further promote financial intermediation, and strengthen the business climate.

IMF staff will continue to provide policy advice and targeted technical assistance in the context of regular visits. Access to IMF financing would require donor financial support for arrears clearance to official creditors and a sustained track record of sound policies.

The mission would like to thank the authorities for close cooperation and warm hospitality.



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