Zimbabwe’s finance minister predicted on Thursday marginal economic growth in the coming year and that the country’s four-figure inflation 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,” Herbert Murerwa told MPs in Harare.
The projected growth will result from ”good weather, stabilising of commodity prices, improved mineral deposits and growing number of tourist arrivals”, Murerwa said.
The country’s agriculture sector is 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 often ended up in the hands of landless Africans who lacked the means and skills to farm, or with associates of the ruling Zanu-PF regime who rarely stayed on their farmsteads.
Mining is 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 Robert Mugabe and his two deputies 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 living in poverty.
Zimbabwe is in the seventh year of an economic recession characterised by an inflation rate that 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 population live below the poverty threshold, often skipping meals and walking or cycling long distances to work in order to stretch their wages to the next payday.
The 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 Robert 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 its currency and introduced a new series of bank notes 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 United States dollar was fetching anything between Z$1 850 and Z$2 000 dollars against the official rate of 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. — Sapa-AFP