Zimbabwe likely to cut growth forecast

Zimbabwe was likely to cut this year’s 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 yesterday.

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 said.

The economy grew 5,1% last year, compared with an earlier projection of 4,7%, Biti said.

Donors and investors are concerned, among other issues, about the slow political progress and a proposed law forcing foreign companies to hand over a majority stake in domestic units to black citizens of the country. 

While Zimbabwe’s Prime Minister Morgan Tsvangirai repeated this week that the law was “null and void”, President Robert Mugabe said the indigenisation and economic empowerment law was delayed for “improvements”. 

Biti has fully recovered from injuries sustained in a crash involving the vehicle he was driving and a haulage truck along the Harare-Bulawayo road last month.

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