Zimbabwe’s almost $11 billion in debt puts it in “distress” and impedes the southern African nation’s sustainability because it’s 113 times gross domestic product, the International Monetary Fund said.

The country’s total external debt is “estimated at $10.7 billion at end-2011, of which 67 percent of GDP are in arrears,” the fund said on a statement on its website.

“The large debt overhang remains a serious impediment to medium-term fiscal and external sustainability.”

Government operations recorded a cash deficit of 0.6 percent of GDP last year, even though revenue generated was better than expected, while two salary increases “raised employment costs by 22 percent, crowding out social and capital investment,” it said.

The IMF said the effect of the salary increases was worsened “in early 2012 by an increase in employee allowances and unbudgeted recruitment.”

(Source)