Business / Economy
Zimbabwe downgrades 2014 economic outlook
24 Jul 2014 at 11:52hrs | Views
The Zimbabwe government has halved it 2014 real GDP growth to 3.1 percent in line with other forecasts made by the World Bank and the IMF, from the 6.1 percent made during the 2014 national budget.
Finance minister Patrick Chinamasa made the revision in a July 1, 2014 letter of intent and a Memorandum of Economic and Technical Memorandum of Understanding of Zimbabwe to the IMF.
Chinamasa said given the downward revision to the economic outlook for 2014, there are significant risks to the revenue side of the budget.
Chinamasa said the governement's financing space is constrained as it faces large maturities on domestic T-Bills and loans. The government plans to extinguish the remaining stock of pre-2013 domestic payments arrears amounting to $23 million by end-2014. It plans to eliminate the total stock of end-2014 domestic arrears by end-2016.
The Zimbabwe government will accelerate re-engagement with creditors by making payments towards its debts and refraining from making any draw-downs of its SDR holdings.
"We have started making quarterly payments to the African Development Bank (AfDB) and the World Bank, and organized an initial meeting between our Debt Management Office and all three major IFIs in late 2013 to launch discussions on appropriate payments going forward.
"In addition, we will refrain from making any draw-downs of our SDR holdings in 2014, as these constitute the core of our international reserves. We will avoid selective debt servicing, as this would complicate reaching an agreement with creditors on a debt resolution strategy. However, we will continue to make repayments to creditors that are providing us with positive net new financing."
Finance minister Patrick Chinamasa made the revision in a July 1, 2014 letter of intent and a Memorandum of Economic and Technical Memorandum of Understanding of Zimbabwe to the IMF.
Chinamasa said given the downward revision to the economic outlook for 2014, there are significant risks to the revenue side of the budget.
The Zimbabwe government will accelerate re-engagement with creditors by making payments towards its debts and refraining from making any draw-downs of its SDR holdings.
"We have started making quarterly payments to the African Development Bank (AfDB) and the World Bank, and organized an initial meeting between our Debt Management Office and all three major IFIs in late 2013 to launch discussions on appropriate payments going forward.
"In addition, we will refrain from making any draw-downs of our SDR holdings in 2014, as these constitute the core of our international reserves. We will avoid selective debt servicing, as this would complicate reaching an agreement with creditors on a debt resolution strategy. However, we will continue to make repayments to creditors that are providing us with positive net new financing."
Source - online
