Country Report Zimbabwe January 2009

Outlook for 2009-10

• Zimbabwe's president, Robert Mugabe, is expected to leave power during the forecast period, as the economic and humanitarian catastrophe that he has brought about makes his position untenable.
• Mr Mugabe is, however, unlikely to leave office without a struggle, and the actions of the next president of South Africa will be crucial, as he will be in an influential position to force a change.
• Economic policy will continue to be driven by political considerations, and the economy will continue to contract, at a forecast rate of 4.7% in 2009 and 3.7% in 2010.
• Hyperinflation will continue throughout the forecast period, although it may start to decline once a new government that will halt the printing of money to finance its activities is in place.
• Inflation will continue to undermine the value of the currency, with a widening gap expected between the official and parallel rates.
• The global economic slump will reduce demand for Zimbabwe's metal exports in 2009-10. However, the chronic shortage of foreign currency and a collapse in demand will lead to a fall in imports, reducing the trade deficit.

Monthly review

• Mr Mugabe reiterated his determination to hold on to power in a speech during the Christmas period.
• The leader of the opposition, Morgan Tsvangirai, declined an invitation from Mr Mugabe to take up the position of prime minister, claiming that other issues concerning the power-sharing agreement needed to be worked out first.
• The latest round of talks aimed at finding a solution to the deadlock failed in mid-January.
• With the power-sharing agreement deadlocked, Mr Mugabe has unilaterally appointed some new interim ministers, while sacking nine members of the cabinet who failed to win parliamentary seats in the March 2008 elections.
• A cholera epidemic has killed more than 2,000 Zimbabweans, despite MrMugabe's claim that the outbreak was under control.
• Zimbabwe went for the entire year of 2008 without a budget submitted to parliament and is starting 2009 with no budget even close to being presented.
• The Zimbabwe stock exchange has failed to resume trading after the Christmas break owing to new, onerous regulations applied by the government.

Source: Country Report

This report covers the following industry codes:
SIC Code: 49;60;37;15
NAICS Code: 22;52;336;23;11