Country Report Zimbabwe May 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 new South African president may take a more proactive stance on Zimbabwe, but rapid progress is unlikely and he believes that the power-sharing agreement must be given a chance to succeed.
The IMF is set to offer technical assistance, but more substantial lending programmes are unlikely while Mr Mugabe remains in the ascendant.
There should be some recovery in the gold-mining sector following the abolition of foreign-currency surrender requirements.
The economic decline is set to continue, albeit at a slower pace.
Falling commodity prices will hit Zimbabwe's exports in 2009, while imports will fall because of foreign-exchange shortages.

Mr Mugabe appears to be winning the struggle for control of the power-sharing government, restructuring a ministry to ensure that ZANU-PF retains control of important parastatals, for example.
Although the MDC continues to command widespread national support, faith in its ability to transform the socio-economic situation is waning.
A parliamentary committee to drive the process of formulating a new constitution has been established. Delays in the electoral timetable are likely, however.
Although a threatened teachers' strike has been called off, wage restraint is becoming an increasingly difficult issue for the government.
The IMF believes that GDP could grow by 2.8% this year but concedes that there are a substantial number of downside risks to this forecast.
Prices fell by a further 3% in March, meaning that they have declined by 8.3% (cumulative) so far in 2009. Price declines are set to continuealbeit at a slower pacethis year.
A number of local gold-mining groups are planning to reopen or expand operations, buoyed by high international prices and the abolition of foreign-currency surrender requirements.

This report covers the following industry codes:
SIC Code: 10
NAICS Code: 212