Zimbabwe: 2017 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Zimbabwe

IMF Staff Country Reports, July 7, 2017

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Zimbabwe’s economy is facing difficulties.
A severe drought and slow reform momentum have led to high expenditure levels since late 2015 despite subdued revenues.
With limited access to foreign inflows, the ensuing fiscal imbalances have become unsustainable, and are being financed by rising domestic borrowing.
Growth in 2017 is expected to be supported by a strong performance in agriculture mainly owing to exceptional rains.
Economic activity in the medium term is projected to remain subdued, pending adjustment and reform that tackle the structural challenges and enable the economy to restore fiscal and external sustainability and achieve its growth potential.

High expenditure levels have continued since late 2015 despite subdued revenues.
Limited access to foreign inflows has contributed to unsustainable fiscal imbalances.
Fiscal imbalances are being financed by rising domestic borrowing.
A severe drought negatively affected the economy, but exceptional rains are expected to support agriculture in 2017.
Medium-term growth prospects remain subdued without adjustment and reform to address structural challenges.

Subjects: Arrears, Banking, Currencies, Expenditure, External debt, Money, Public and publicly-guaranteed external debt, Public debt
Keywords: Arrears, authorities' effort, authority, bank asset concentration, CR, credit growth, Currencies, current account, debt, government intervention, IMF Zimbabwe team, ISCR, quasi-currency instrument, shored-up government expenditure, Southern Africa, Sub-Saharan Africa, Zimbabwean authorities