Zimbabwe's economy growth forecast cut

Zimbabwe's Finance Minister Tendai Biti says the country's economy, battered by political uncertainty, policy inconsistencies and poor crop harvests, is now expected to grow only by 5.6% this year instead of the 9.4% he projected last December in his 2012 national budget. Presenting his mid-term fiscal policy review statement in parliament, Biti said the government has also revised downwards its revenue targets from $4 billion to $3.4 billion citing poor agricultural production and slow returns in the mining sector, especially diamond revenues. He proposed a wide range of measures including an increase in excise duty on fuel and wheat imports noting that the country needs foreign direct investment to boost the economy as state revenues have stopped growing. The finance minister said power shortages were also having a debilitating effect on the fragile economy. Zimbabwe was expected to generate $600 million this year from diamond sales but the country received only $41.6 million between January and June from companies mining in the controversial Marange field in Manicaland Province. It was supposed to net at least $123 million in the first quarter of the year. The struggling nation registered a growth rate of 9.3% in 2011 following a decade of economic decay.