HomeBusiness DigestMinister predicts marginal economic recovery

Minister predicts marginal economic recovery

By Godfrey Marawanyika

FINANCE minister Herbert Murerwa yesterday predicted marginal economic growth in the coming year and that the country’s four-figure inflati

on rate would dip to 350% as he presented the budget for 2007.

“The economy is expected to grow marginally by between 0,5 % and 1% in 2007,” Murerwa told parliament yesterday.

The projected growth would result from “good weather, stabilising of commodity prices, improved mineral deposits and growing number of tourist arrivals”, Murerwa said.

The country’s agriculture sector was expected to grow by 6,4% because of good rains anticipated in the current farming season, he said.

Agriculture was one of the pillars of Zimbabwe’s economy before the government launched controversial land reforms seizing properties from white farmers for redistribution.

The land ended up in the hands of blacks who lacked the means and skills to farm or with associates of the ruling Zanu PF regime who rarely stayed on their farmsteads.

Mining was expected to benefit from favourable international mineral prices and grow by 4,9 %.

Murerwa said inflation, often referred to as “our enemy number one” in government circles, was targeted to decelerate to between 350 to 400% by September 2007.

President Mugabe and his two vice-presidents were in parliament listening to the budget proposals which Murerwa said were aimed at creating jobs and improving standards of living for the majority of the population.

Zimbabwe is in the seventh year of an economic recession characterised by an inflation rate which once breached the 1 200% mark, chronic shortages of foreign currency, fuel and basic foodstuffs such as cooking oil and an unemployment rate hovering over 70%.

At least 80% of the country’s 13 million people live below the poverty line often skipping meals and walking or cycling long distances to work to stretch their wages to the next pay day.

Government blames the situation on targeted sanctions imposed by western countries while critics say the country’s troubles are the result of economic mismanagement.

In April this year President Robert Mugabe’s government launched an economic blueprint that was expected to see the country emerge from its economic troubles within six to nine months.

The National Economic Development Priority Programme steered by a national security council chaired by President Mugabe was expected to enhance foreign currency generation and promote tourism.

In July the central back launched a blitz on cash hoarders, slashed three zeros from the currency and introduced a new series of banknotes in a move aimed at snuffing out a burgeoning parallel foreign currency market.

But analysts say the measures were far from reining in the foreign currency black market where the US dollar was fetching anything between $1 850 and $2 000 against the official rate of US$1:$250.

Murerwa proposed a battery of measures to curtail inflation including reducing money supply by the central bank, curbing unbudgeted expenditure and reducing imports.

He admitted the country was facing “enormous economic challenges” but said Zimbabwe’s economy was resilient and would pull through the mounting hardships. -— AFP.

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