In Major Revision, Zimbabwe Finance Minister Projects 8.1 Percent 2010 Growth
Economists dismissed Finance Minister Tendai Biti’s new projection saying the economy remains fragile with politics a key risk factor
Tendai Biti said stronger tobacco sales and unexpected growth in manufacturing, mining and tourism, coupled with a decline in inflation rate, seemed likely to drive expansion of the gross domestic product to 8.1 percent. Finance Minister Tendai Biti says Zimbabwe’s economy is likely to expand by 8.1 percent this year on the back of a strong recovery in agriculture and unexpected growth in manufacturing, mining and tourism. Biti told a gathering of business leaders in Harare on Thursday that agricultural output is expected to increase by 34.1 percent, exceeding an earlier 18.8 percent forecast. He said tobacco sales and unexpectedly strong growth in manufacturing, mining and tourism, coupled with a decline in inflation, seemed likely to push the nation’s growth rate to 8.1 percent - almost double the 4.5 percent growth Biti projected in his mid-year fiscal policy review. He initially called for 7.7 percent growth. But economists dismissed Biti’s latest projection, saying the economy remains in the doldrums. Economist John Robertson told VOA Studio 7 reporter Gibbs Dube that he expects growth of about 4 percent. “Most of our own producers have yet to get back to work at the levels that will provide that much growth.” Political and economic commentator Rejoice Ngwenya said recurring violence in the context of the constitutional revision process could derail Biti’s brighter economic projections. In other economic news, pilots for Air Zimbabwe, the state-controlled carrier, ended a two-week strike Friday after the Flight Crew Association and the government reached agreement on salaries. The pilots and cabin crew were demanding a pay increase and settlement of six months arrears in pay and allowances. Reports said the government agreed to pay 40 percent of the US$3 million demanded by the pilots in back pay and allowances. The state carrier earlier dismissed the pilots when they refused to return to work. Economic analyst Masimba Kuchera told VOA Studio 7 reporter Chris Gande that the end of the strike is good news for Air Zimbabwe’s owner – the cash-strapped Harare government.