Zimbabwe: Backs to the wall

by / Thursday, 01 October 2015 / Published in Economy

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Dominant and dangerous

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Drought and a weak rand may do more than a decade of sanctions to spur change

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BEER-DRINKERS should have been clinking glasses in celebration when, at the start of the year, Zimbabwe’s biggest brewer slashed the price of lager by 10%. Yet instead of chugging back their brews, Zimbabweans are being forced to sober up by an economic crisis that is hitting harder than most measures would suggest. Viewed through the bottom of a beer glass, the economy is as close to collapse as it has ever been.
Despite price cuts of more than 20% over the past year, sales of beer have fallen by 8%. Other symptoms of harmful deflation abound. The collection of value-added tax has slumped by 8%. Corporate tax receipts have fallen sharply, too, as have sales of tobacco, Zimbabwe’s main export crop. The IMF reckons Zimbabwe’s economy will grow by about 1.5% this year, but that seems optimistic, …
Source: The Economy