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IMF Official Deplores 'Tragic' Zimbabwe Economic Slide; Harare Blames Sanctions

A top International Monetary Fund official called Zimbabwe’s economic outlook "grim" following news that consumer inflation in the country has pushed over 1,200%.

Addressing a news conference at IMF headquarters late last week, Africa Department Deputy Director Siddhartha Tiwari responded to a question as to how much higher inflation might go, and whether a deeper economic downturn was in store.

Tiware said that "there is no upper bound to inflation rates, unfortunately. It depends on the stance of policies. For Zimbabwe, the country is in a difficult situation. It has faced three, four, five, six years of continuous output decline, a rise prices at these rates over several years, increase in poverty, a decrease in public services, increasing HIV/AIDS rates. It is a tragic situation, frankly, and prospects are grim."

He said there was some encouragement to be found in reports that the government of Zimbabwe has pulled together some $490 million in new financing to support the farm sector, but that this would not be enough. "While financing will be helpful to Zimbabwe, fundamental changes in economic policies are needed. I think I would like to note that there is substantial goodwill on the part of the international community to help Zimbabwe, but the first step has to be taken by the authorities."

More bad economic news emerged Monday in Harare. The Central Statistical Office said its total consumption poverty line rose more than 18% to Z$100,000 (US$400) for a family of five. But most households in Zimbabwe have an income of only Z$17,000 a month, according to the Labor and Economic Development Institute in Harare.

In a bid to halt the upward price spiral, the government has deployed some 200 police officers to enforce price controls. Reports said three company executives have been arrested in the past several days on charges they illegally raised their prices.

For another view on Tiwari's bleak assessment and other economic news, reporter Blessing Zulu of VOA's Studio 7 for Zimbabwe turned to Iraj Abedian, chief executive of Pan African Advisory Services in Johannesburg, South Africa. He said recovery is possible only if the government can engage the opposition and civil society.

But Deputy Finance Minister David Chapfika blamed the economic meltdown on the Western sanctions imposed on Harare, adding that the government has homegrown solutions that will eventually end the crisis and bring about a recovery.

More reports from VOA's Studio 7 for Zimbabwe...