Zim economy gathers speed

Harare - Zimbabwe is expecting its economy to grow to 9.3% in 2011 as the country's recovery from an economic meltdown in 2008 quickens, Finance Minister Tendai Biti said on Thursday.

Biti was unveiling the 2011 budget in parliament.

Gross domestic product (GDP) is predicted to grow 8.1% this year, compared with 5.7% in 2009, following dramatically increased mineral earnings, Biti said.

Inflation, which ran into the billions of percent at one point during the crisis, is expected to be at 4.8% by year's end.

Zimbabwe's economic turnaround kicked in after President Robert Mugabe agreed to share power with then opposition leader Morgan Tsvangirai in 2008.

Tsvangirai is now prime minister in a coalition government.

From the outset the government has been beset by bickering between Mugabe's Zanu-PF and Tsvangirai's Movement for Democratic Change (MDC) - mainly over Zanu-PF's reluctance to implement agreed-upon reforms.

Biti said the political impasse and continuing economic hardship in the country, which is ranked the world's least developed on the United Nations Human Development Index, were causing a climate of despair.

For buoyant growth to be maintained, more governance reforms were needed, he said.

He also warned about the government's high debt levels.

Zimbabwe has notched up nearly $6bn in foreign debt.

Biti said he expected the government to take in $2.7bn in revenue in 2011 - against a projected $2.25bn in 2010.

Mineral earnings shot up 47% in 2010, most of it from platinum, ferrochrome and gold, he said.

Diamonds made up only 9% of mineral earnings, including $85m from the controversy-plagued Marange diamond fields, hailed the richest diamond find in decades.

Analysts say that the economy is being held back by Mugabe's bid to force white- and foreign-owned businesses to yield their majority shareholdings to black Zimbabweans. The regulations spooked foreign investors when they were gazetted earlier this year.