via Recession fears for Zim economy | The Herald May 13, 2014
ZIMBABWE’s economy may slip into recession by 2015 if there are no fundamental policy shifts, according to Reserve Bank of Zimbabwe (RBZ) deputy governor Dr Kupukile Mlambo. Dr Mlambo said this while addressing a recent SAPES and NED conference on Zimbabwe “Going Forward: Consolidating the democratization process and reinforcing re-engagement with the global community.”
“Our estimate at the RBZ is that growth will be negative next year if things continue as they are. Last two months inflation has been negative and if it continues for the third month we enter into deflation. The problem is if this happens we don’t have the instruments to come out of deflation,” said Dr Mlambo.
Dr Mlambo said the country’s $7 billion debt overhang needed to be addressed by adopting the Highly Indebted Poor Country (HIPC) strategy which would afford the country debt relief.
“Debt is also of concern to us in particular the arrears which are a major component of the debt; we have to accept that we are a highly indebted poor country. On the continent three countries qualify for HIPC; these are North Sudan, Somalia and Zimbabwe.
However Somalia is likely to get it because it has made more progress”.
He added that government needs to have a predictable policy framework and implement the IMF approved staff monitored programme if it is to gain the confidence of investors and multilateral financial institutions.
“Policy consistency is key to attracting FDI and the staff monitored programme are a means to gain the confidence of investors and international financial institutions if implemented”.
Dr Mlambo said the country needed to find a champion among the Fishmongers group to help it market its policies to the international community.
“We need a champion for our cause in the manner France championed the cause of Ivory Coast or how Japan championed the cause of Burma.
“We need a champion ourselves who must be credible and a member of the Fishmonger group,” said Dr Mlambo – FinX.