IMF chief says economy is in a “very dangerous state”

Outgoing head of the International Monetary Fund (IMF), Michel Camdessus, said the Zimbabwean economic situation is “very dangerous” and the government has to reduce its military spending.

Camdessus was speaking from Washington to journalists in Zimbabwe, South Africa, and Nigeria via a 90 minute satellite link-up. During the session he said the IMF was willing to compromise with Zimbabwe over certain economic reforms, but the international community was growing increasingly impatient with the Zimbabwean government. “You have a very dangerous trend towards inflation, you have very dangerous trend to excessive public expenditure, and structural problems which prevent the country to go at the level you need it to go in making a difference in alleviating poverty,” Camdessus said.

He also blamed the “impact of military spending” for Zimbabwe’s inflation, which he said was the “most cynical way of taxing the poor.”