Oct 1, 2009 9:17 AM | By Reuters
IMF sees Zimbabwean economy growing 3.7% in 2009
Washington Zimbabwes economy is projected to grow by 3.7% this year, according to the International Monetary Fund, the first expansion since 1997.
The IMF, in its latest World Economic Outlook, published on Thursday, did not give reasons for its assessment. It forecast that growth in the southern African nations gross domestic product would accelerate to 6% in 2010. The economy contracted 14.1% in 2008, according to the Imf.
The growth projections for 2009 are in line with the Zimbabwean governments own forecasts, announced in July. The economy last grew 12 years ago, expanding by 3.0%, according to data from the Reserve Bank of Zimbabwe.
Southern Africas former breadbasket has seen its once vibrant economy shattered by poor policy choices by President Robert Mugabes government, particularly the seizure of white-owned farms for the resettlement of landless blacks.
But the formation of a unity government by Mugabe and his political rival Morgan Tsvangirai appears to have halted the economys free-fall, although unemployment still hovers around 80-85% and industries are operating at only 20 and 30% capacity.
The withdrawal of the worthless Zimbabwean dollar from circulation early this year is also breathing life into the economy, which had battled world record-beating inflation.
The IMF forecast consumer inflation would average 9% this year and rise to an average of 12% in 2010. The fund forecast the countrys current account deficit at 21.4% of GDP in 2009, narrowing to 19.9% next year.
Zimbabwe says it needs $10 billion in foreign aid to rebuild the country, but Western nations are reluctant to release cash without further political and economic reform under the unity government.
Finance Minister Tendai Biti said last month it would be a long while before the country received bilateral assistance.
http://www.timeslive.co.za/news/world/article133914.ece
Zimbabwe will see better-than-expected economic growth of 4,7% this year, ending a decade of financial ruin, Finance Minister Tendai Biti said on Wednesday in his first annual budget speech.
The growth marks the first time that Zimbabwe’s economy has grown in 12 years, after a decade of stunning hyperinflation that impoverished the nation.
The new figure tops earlier estimates of 3,7% growth, due to stronger performance in mining and agriculture, he said.
"We are now expecting to register a higher growth rate of 4,7% by the end of the year," he told Parliament.
"We are expecting the economy to grow by 7% in 2010."
Zimbabwe halted its economic freefall this year by abandoning its local currency, left worthless by inflation estimated in multiples of billions.
Agriculture was once the backbone of Zimbabwe’s economy, but farming has been decimated since President Robert Mugabe began a chaotic and often violent campaign of land reforms to give formerly white-owned farms to black Zimbabweans.
The new farmers have been provided few resources for their crops, sending food production plunging and forcing the country to depend on international handouts to feed more than half of its 13-million people.
Planting for a new season is now under way, and Biti said the amount of land under cultivation would expand for both food and cash crops like tobacco.
He predicted that tobacco, once the main foreign currency earner, would yield 200-million kilos next year, up five-fold from this year.
Private investors are expected to pour $600-million into tobacco for the next crop, he said.
Biti again ruled out a return of the Zimbabwe dollar, saying the country would continue to allow use of foreign currencies such as the US dollar and the South African rand.
Biti, a top ally of Prime Minister Morgan Tsvangirai, took over the finance portfolio in February at the swearing-in of the unity government with Mugabe, following disputed elections last year. — Sapa-AFP
18 January 2010
Zimbabwe State workers threaten strike in two weeks
Zimbabwean State teachers and health workers threatened on Wednesday to strike over low pay, in a move that would paralyse public services and put pressure on a unity government struggling to reverse a decade of economic collapse.
A powersharing administration set up last year by President Robert Mugabe and his bitter rival Prime Minister Morgan Tsvangirai in a bid to end a protracted economic and political crisis says it needs at least $10-billion to fix the economy.
The three major unions representing government workers, who earn an average of $160 a month, told reporters at a joint news conference in Harare that they would strike if their demand for a minimum wage of $630 was not met within two weeks.
The unions said they rejected the government’s offer of $236 a month for the highest paid public servant.
government
"The civil servants in Zimbabwe … register their displeasure and utter dismay at the paltry offer the government has put forward," the unions said in a statement.
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"Civil servants therefore demand an urgent redress of this situation before it’s too late…we are giving the leadership of the country 14 days to decisively intervene on this issue as a matter of urgency."Finance Minister Tendai Biti has said that the government wage bill takes up 60% of total revenue and that limited resources available made it difficult for the state to award significant wage increases.
But government workers said they had no choice.
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"Our members are suffering, we cannot pay our bills, the tariffs are higher than our wages," said Cecilia Alexander, president of the Public Service Association (PSA), an umbrella body for all civil servants.
A strike by teachers and health professionals, who make up the bulk of the civil service, would severely affect efforts to revive core sectors which collapsed at the height of Zimbabwe’s crisis in 2008 when services at public schools and hospitals ground to a halt.
State media reported on Wednesday that although schools had opened on schedule for the new term, State-employed teachers were not giving lessons in protest against the slow pace of wage negotiations with the government.
Zimbabwe’s unity government has managed to stabilise the economy, mainly by dumping a local currency rendered worthless by hyperinflation which peaked at 500-billion per cent in December 2008 and adopting the use of multiple currencies.
The country’s economy grew for the first time in a decade last year – by a better than expected 4,7% – and tamed hyperinflation, but analysts say the economy will only take off on the back foreign investment and Western aid.
Investors and Western donors are, however, holding out for signs that the unity government will last and watching if Mugabe is ready to genuinely share power with Tsvangirai and institute broad reforms.
The fragile coalition has been rocked by frequent wrangles over the pace of reforms, senior government appointments such as that of Central Bank governor and Attorney-General, as well as sanctions imposed on Mugabe and his inner circle