Friday, November 30, 2007

(NEW ZIMBABWE, REUTERS) Zimbabwe finance minister predicts growth

Zimbabwe finance minister predicts growth
Last updated: 11/29/2007 20:53:03

ZIMBABWE'S economy is expected to grow by 4.0 percent next year, while inflation should slow, Finance Minister Samuel Mumbengegwi said on Thursday, signalling what would be the first GDP expansion in nine years.

"The 2008 budget is premised on a real GDP growth of 4 percent due to growth in agriculture (and) the industrial sector," he said in a televised budget speech to parliament. Annual inflation, which measured almost 8,000 percent in September, was forecast to slow to 1,978 percent for 2008. Mumbengegwi urged Zimbabwe to "live within our means". "The 2008 macro-economic framework is premised on a projected real economic growth of four percent, due to the anticipated growth in the agriculture sector, improved industrial performance and economic programmes by the grassroots," Mumbengegwi told parliament in Harare.

He said the current economic woes were enormous but surmountable.

"They require our urgent, committed and determined implementation of agreed policies and measures as enunciated in the People's Budget," said the minister.

"The reality of being under sanctions is that we are on our own, hence, the need for increased self reliance on our own initiatives and resources."

He said despite the drought conditions experienced during the 2006/2007 cropping season, the agricultural sector was also projected to grow by about four percent.

The projected growth would result from "good weather," Mumbengegwi said.

President Robert Mugabe was in parliament listening to the budget proposals unveiled by Mumbengegwi.

Zimbabwe is in the eighth year of an economic recession characterised by an runaway inflation, chronic shortages of foreign currency, fuel and basic foodstuffs such as cooking oil and an unemployment rate hovering over 70 percent.

At least 80 percent of 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.

Mumbengegwi proposed a clutch of measures to reduce inflation including reducing money supply by the central government.

He however did not announce the October inflation figures "because many items included in the consumer-basket have not been available in the shops."

The finance minister admitted the country was facing "enormous economic challenges" blaming the country's woes on targeted sanctions imposed by western countries on Mugabe and members of his ruling party elite. - Reuters/AFP

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