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Zim sees 8.9% growth in 2013

Oct 12 2012 11:20

Harare - Zimbabwe’s economy is projected to grow 8.9% next year if the political environment remains stable and the government lives within its expenditure targets, the finance ministry said on Friday in a pre-budget statement.

Uncertainty over the date and conduct of elections due within the next year is casting a shadow over the economy given Zimbabwe’s recent history of violent and disputed polls.

Finance Minister Tendai Biti is due to present the budget to parliament on November 15.

In July, Biti, a senior member of Prime Minister Morgan Tsvangirai’s Movement for Democratic Change (MDC), slashed his 2012 growth forecast to 5.6% from 9.4%t due to a poor harvest and a lack of donor funding and investment.

The finance ministry statement said inflation, which has remained in single digits since Zimbabwe adopted foreign currencies in 2009, would average 5% next year.

Consumer inflation slowed to 3.63% in August from 3.94% previously.

The government projects that revenues should grow to $3.8bn next year from an expected $3.4bn in 2012 as authorities crack down on corporate tax defaulters.

After a decade of steep economic decline and hyperinflation, Zimbabwe’s economy has been growing since the formation in early 2009 of a unity government between Tsvangirai and veteran President Robert Mugabe.

In its annual review of the Zimbabwean economy, the International Monetary Fund said growth should moderate over the medium-term to average about 4%, although poor power supply and tight liquidity conditions could pose problems. 

The southern African country also carries a huge debt burden that is preventing it from securing new aid. Its total external debt was estimated at $10.7bn, or 113.5% of GDP, at the end of 2011. Of this, more than half is in arrears.

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