logo

Zimbabwe’s cash shortages could worsen: IMF

PUBLISHED: Mon, 15 May 2017 20:06:34 GMT

Share

HARARE (Reuters) – Zimbabwe’s cash shortages could worsen and inflation may be triggered if President Robert Mugabe’s government doesn’t temper excessive state spending, the International Monetary Fund said on Monday.

The southern African nation has been grappling with cash shortages since last year and the introduction of a “bond note” currency in November has failed to meet demand.

Without balance of payment support from international financial institutions, President Robert Mugabe’s government has relied on taxes and the domestic market for borrowing, sending the budget deficit spiralling in 2016.

“Excessive government spending, if continued, could exacerbate the cash scarcity, further jeopardize the health of the external and financial sectors, and, ultimately, fuel inflation,” the IMF said after a country visit.

http://cnbc.africa/news/southern-africa/2016/11/25/as-zimbabwes-money-runs-out-so-does-mugabes-power/

Official data on Monday showed inflation rising to 0.48 percent in April, the second month consumer prices have increased following more than two years of deflation.

(Reporting by MacDonald Dzirutwe; Editing by Joe Brock)

© Thomson Reuters 2017 All rights reserved


Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent. Sign up here.