Accessibility links

Harare's 2006 Growth Projections Draw Skepticism

Zimabwean Finance Minister Herbert Murerwa's forecast of renewed economic growth in 2006 as a key assumption for the 2006 budget he unveiled this week has drawn some skepticism. Given the steep downward trajectory of the economy some consider this to be wishful thinking at best.

Mr. Murerwa presented a Z$124 trillion budget to parliament on Thursday, projecting gross domestic product growth of 2% to 3.5% next year after an estimated contraction of 3.5% in 2005. Inflation has reignited and is now running at an annual rate in excess of 400% with little sign of slowing.

Senior economist David Cowan of the London-based Economist Intelligence Unit says Harare has not made the reforms necessary to revive an economy that has been shrinking for six years.

Mr. Cowan told reporter Chinedu Offor of VOA's Studio 7 for Zimbabwe that Mr. Murerwa's call for a pickup in manufacturing, agriculture and mining is unrealistic.

Agriculture has been crippled by continuing state land seizures and wildcat takeovers by ruling party officials, army officers and local officials, as well as by scarcities of seed, fertilizer and fuel. Export manufacturing firms in particular have been hit hard by a lack of access to foreign exchange, in addition to extreme shortages of fuel and a generally hostile economic environment.

More reports from VOA's Studio 7 for Zimbabwe...