Geez - And You Think THIS Country Is Broke?
The government of Zimbabwe reportedly has just $217 in the bank. |
According to Agence France Presse, Finance Minister Tendai Biti told reporters in Harare today that that's the amount that was left after the government paid its civil servants last week.
"The government finances are in paralysis state at the present moment," he said. "We are failing to meet our targets."
Zimbabwe is in deep trouble, having begun to rebound after a spell of hyperinflation that ended a few years ago, along with a new government.
According to the International Monetary Fund in a report last September, the country's recovery is "moderating" after two years of strong growth, an average of 9.5 per cent in 2010 and 2011. That was fuelled by mining exports and consumer demand, but was forecast to slow last year.
But there was intense pressure on public finances in 2011 and last year.
"Despite better-than-expected revenue performance, central government operations recorded a cash deficit of 0.6 per cent of GDP in 2011 and domestic arrears accumulation of about 1 per cent of GDP, due mainly to two salary increases that raised employment costs by 22 per cent, crowding out social and capital investment," the IMF said.
"The effect of the salary hikes was compounded in early-2012 by an increase in employee allowances and unbudgeted recruitment," it added in its report.
"Fiscal pressures were exacerbated by significant underperformance of diamond revenues during the first half of 2012. In response to the fiscal slippages, in July the government announced expenditure and revenue measures, as well as a reassessment of diamond revenue flows. The measures include a hiring freeze, suspension of a number of diamond-revenue-financed projects, increases in excises on fuel, and enhanced monitoring of the mineral resources."
Read the IMF report: http://www.imf.org/external/np/sec/pn/2012/pn12113.htm
Guess it's time to print up some more 100 Gazillion dollar notes!
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