Saturday, July 29, 2006

Zim: offers little to fix economy

HARARE (Reuters) - Zimbabwe's government unveiled changes to the 2006 budget in a policy review on Thursday, but critics said it failed to offer any proposals to reverse an economic crisis that has impoverished the population.

Finance Minister Herbert Murerwa predicted positive growth for the first time in 8 years, although lower than previous estimates, but did not spell out how he would tackle a meltdown widely blamed on the government which has left Zimbabweans grappling with soaring living costs.

Murerwa said the economy would probably grow by 0.3-0.6 percent during 2006, down from a previous estimate of 1-2 percent. It shrank 2.7 percent in 2005 and has contracted by more than 40 percent since 1999, pressured by chronic shortages of fuel, foreign exchange and food.

Murerwa had no answers for the economic crisis which has pushed inflation up to nearly 1,200 percent -- a world record -- and unemployment up to 70 percent.

"The challenges we are facing, though seemingly entrenched, are surmountable," he told parliament in a televised statement.

"The biggest challenge remains that of runaway inflation, which is constraining economic growth prospects and imposing enormous social and economic hardships on the population."....

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