IMF scrutinises Zimbabwe economy

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An International Monetary Fund (IMF) team is in Zimbabwe, which is suffering soaring inflation, to examine President Robert Mugabe's economic policies.

Zimbabwe has the world's highest rates of annual inflation - more than 1,000%. Poverty levels have risen and unemployment is around 80%.

The IMF will spend 10 days of talks, a year after Zimbabwe averted expulsion from the fund by clearing some arrears.

The visit will go towards deciding what to do about Harare's IMF debts.

ZIMBABWE CRISIS Life expectancy 30 yearsHigh dependency on food aid20% adult HIV prevalenceShortages of basic foodstuffsHigh unemploymentInflation 1,200% <a href="/1/hi/business/5348898.stm" class="">New high for inflation</a>

Zimbabwe avoided expulsion from the IMF with a $9m debt payment. The country still owes the fund $125m and its IMF voting rights are suspended.

The IMF report will be used by the fund's board to decide Harare's fate when it meets in Washington in February to review the overdue debt payments.

Government borrowing has forced the central bank to print more money to prop up the economy.

But Zimbabwe has now agreed to end inflationary policies used by the bank.

The IMF and other Western donors, including the World Bank, suspended aid to Zimbabwe more than six years ago over policy differences with Harare.

Donor agencies want to see less state control of the economy and a relaxation of foreign exchange controls.

Mr Mugabe's government says it is a victim of a Western sabotage campaign over its land reforms.