IMF sees Zimbabwe economy growing 3.7 % in 2009

WASHINGTON – Zimbabwe's economy is projected to grow by 3.7 percent this year, according to the International Monetary Fund, the first expansion since 1997.

The IMF in its latest World Economic Outlook published on Thursday did not give reasons for its assessment. It forecast that growth in the southern African nation’s gross domestic product would accelerate to 6 percent in 2010. The economy contracted 14.1 percent in 2008, according to the IMF.

The growth projections for 2009 are in line with the Zimbabwean government’s own forecasts, announced in July. The economy last grew 12 years ago, expanding by 3.0 percent, according to data from the Reserve Bank of Zimbabwe.

Southern Africa’s former breadbasket has seen its once vibrant economy shattered by poor policy choices by Robert Mugabe’s government, particularly the seizure of white-owned farms for the resettlement of landless blacks.

But the formation of a unity government by Mugabe and his political rival Morgan Tsvangirai appears to have halted the economy’s free-fall, although unemployment still hovers around 80-85 percent and industries are operating at only 20 and 30 percent capacity.

The withdrawal of the worthless Zimbabwean dollar from circulation early this year is also breathing life into the economy, which had battled world record-beating inflation.

The IMF forecast consumer inflation would average 9 percent this year and rise to an average of 12 percent in 2010. The fund forecast the country’s current account deficit at 21.4 percent of GDP in 2009, narrowing to 19.9 percent next year.

Zimbabwe says it needs $10 billion in foreign aid to rebuild the country, but Western nations are reluctant to release cash without further political and economic reform under the unity government.

Finance Minister Tendai Biti said last month it would be a long while before the country received bilateral assistance.