Govt to revise economic growth forecast: Biti

Biti told reporters in Harare last week that donors had to date provided only US$2.9 million to finance a US$810 million budget deficit, as the international community remains skeptical of the February 2009 power-sharing government between President Robert Mugabe and Prime Minister Morgan Tsvangirai.

“If this slow off-take persists, then we may have to revise our growth target to about 4.8 percent. We are not doing this now, but will make a definitive statement in the mid-year budget review,” Biti said.

Zimbabwes economy may have turned a corner last year when it grew by 5.1 percent compared to an earlier projection of 4.7 percent, but full recovery could be clouded by political disputes between Mugabes Zanu (PF) party and Tsvangirais MDC that are holding back badly needed foreign investment and donor support.

The two parties are involved in talks under the supervision of South African President Jacob Zuma, who is the South African Development Community (SADC) mediator in the crisis, to resolve outstanding issues from their 2008 global political agreement (GPA) that set up the coalition.

Notwithstanding the prevailing macroeconomic stability and the anticipated positive economic performance, the economy is facing a number of downside risks, with potential to reverse some of the gains realised to date as well as sustainable quick recovery of the economy. There is perceived high risk factor around the political settlement, Biti said.