November 5, 2012 / 9:29 AM / in 5 years

Zimbabwe cuts growth forecasts again: paper

HARARE (Reuters) - Zimbabwe’s government has reduced its 2012 growth forecast to 4 percent due to a poor harvest and lack of foreign investment, the second cut in its economic outlook in four months, local media reported on Monday.

Finance Minister Tendai Biti holds his Budget briefcase before delivering his mid-term budget review at Zimbabwe's Parliament building in Harare July 18, 2012. REUTERS/Philimon Bulawayo

“About a third of the 2012 maize production was lost to drought and new information shows that the growth rate of 5.6 percent earlier announced ... will likely be revised downwards to around 4 percent,” the Daily News quoted Finance Minister Tendai Biti as telling legislators in the resort town of Victoria Falls.

Biti has now slashed growth expectations twice this year from an initial forecast of 9.4 percent.

He was not immediately available for comment on Monday but is likely to speak on the economic outlook in his 2013 budget statement next week.

Economic growth is losing momentum partly due to increasing squabbles within the coalition government of President Robert Mugabe and Prime Minister Morgan Tsvangirai ahead of elections expected next year.

The latest revision is in line with that of the International Monetary Fund, which said in September growth should moderate over the medium-term and that electricity supply problems and tight liquidity posed risks.

Zimbabwe’s economy grew 9.6 percent in 2010 and 9.3 percent last year as it rebounded from a decade-long recession widely blamed on the policies of Mugabe, 88, who has held onto power since independence from Britain in 1980.

With elections expected in 2013, there are rising concerns of a repeat of the violence that marred a 2008 presidential poll and accelerated the southern African country’s downward economic spiral.

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