Zimbabwe economic growth rate to rebound to 6% this year, IMF says

NAIROBI, Oct 3 (Reuters) – Zimbabwe's economic growth is expected to rebound to a 6% rate this year, the International Monetary Fund said, citing improving agricultural production, record-high gold prices and robust remittances from its citizens who live abroad. Economic growth in the southern Africa nation, which is engaging with creditors to clear arrears and restructure its debt, fell to 1.7% last year, mainly due to a drought that cut crop output and hydroelectric production. "Despite lingering policy challenges, Zimbabwe is experiencing a degree of macroeconomic stability," the IMF said in a statement late on Thursday after a review of Zimbabwe's economy. The government's growth forecast for this year is 6.6%. Growth could, however, slow to 3.5% in the medium term, the IMF said, due to persistently low confidence in the "durability" of economic stabilization plans and government reliance on local borrowing, which could squeeze private credit growth. The government has been issuing Treasury bills to raise funds to pay off a significant build-up in domestic arrears since last year, the Fund said. It called for a tighter fiscal stance to deal with the financing challenges. The government is also still struggling with a gap between its official and parallel foreign exchange rates, the IMF said, in spite of the introduction of a gold-backed currency called the ZIG in April last year. (Reporting by Duncan Miriri; Editing by Christian Schmollinger)

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