Country Report Zimbabwe June 2009

Summary

The president, Robert Mugabe, looks increasingly likely to hang on to power over the forecast period as he continues to outmanoeuvre the opposition.
The Movement for Democratic Change (MDC) is likely to try to persevere with the power-sharing agreement, not least because it fears that forcing an election could lead to widespread violence.
The MDC will continue to seek the removal of the governor of the central bank, seeing his continued presence as an obstacle to its control over key economic ministries.
Consumer prices have continued to fall, but the rate of decline is slowing.
The government is studying the possibility of joining the Rand Monetary Area, but any formal link to the rand is unlikely before 2010 given the huge disparity between Zimbabwean and other Southern African inflation rates.
With the reopening of some gold mines and of the ferrochrome producer, Zimasco, mining and manufacturing output will start to recover this year.
Imports are set to increase slightly in 2009, reflecting a rise in foreign aid for humanitarian purposes and the US$1bn in foreign credit lines reportedly negotiated by the government.

The MDC has referred a dispute over political appointments to regional groups, but this appeal is unlikely to succeed.
A new opinion poll puts support for Mr Mugabe's Zimbabwe African National Union-Patriotic Front (ZANU-PF) at just 6%.
The government says that it has secured US$1bn in credit lines from African banks and agencies, but Western donors remain cautious.
Tax revenues are improving somewhat but remain well below budgeted levels.
Provisional estimates from the Central Statistical Office (CSO) suggest that GDP declined by 17% in 2008, although CSO data suggest that there was very little deterioration in economic services.
Credit remains scarce and very costly, according to local firms, but the Confederation of Zimbabwean Industries is upbeat.

This report covers the following industry codes:
SIC Code: 60;10
NAICS Code: 52;212;11