Zim likely to cut growth forecast

Harare - Zimbabwe is likely to cut its 2010 economic growth forecast from 7.7% to 4.8% due to political uncertainty and its failure to attract foreign donor support, Finance Minister Tendai Biti said on Thursday.

Biti said donors had so far provided only $2.9m to finance an $810m budget deficit.

"If this slow off-take persists then we may have to revise our growth target to about 4.8%. We are not doing this now, but will make a definitive statement in the mid-year budget review," Biti told reporters.

The southern African nation's economy grew by 5.1% in 2009 compared to an earlier projection of 4.7%, Biti said.

Zimbabwe's power-sharing government, formed last year by bitter rivals President Robert Mugabe and Morgan Tsvangirai, now prime minister, says the country needs at least $10bn to fix an economy that shrank by over 40% between 2000 and 2008.

But analysts say frequent wrangling over reforms within the coalition and doubts that Mugabe is ready to genuinely share power have resulted in donors withholding significant aid, delaying economic recovery.

"The 2010 budget counts on significant support of donors, amounting to $810m, but the regrettable thing is that donor financing, which we had earmarked for capital projects has not materialised," Biti said.

"It is our politics that explains why there's multilateral (donor) support for Zambia and Botswana but none for Zimbabwe."

- Sapa