HARARE – Zimbabwe’s economy could grow at a faster pace than the six percent annual growth rate the International Monetary Fund (IMF) has predicted for the economy after 2009, Renaissance Capital has said.

The Russian-headquartered fund, however, said it could take up to 2016 for Zimbabwe’s gross domestic product (GDP) to reach its 1997 peak of US$9 billion. Zimbabwe’s GDP is estimated at about US$3 billion.

The IMF said in February that Zimbabwe’s economy – once one of the most vibrant in Africa – could possibly hit a sustained growth of six percent annually after 2009 following formation of a coalition government between President Robert Mugabe and Prime Minister Morgan Tsvangirai.

The Bretton Woods institution that has resumed technical cooperation with Harare since the coalition rule also predicted inflation to average 6.9 percent in 2009.

But Renaissance Capital, which manages millions of dollars worth of foreign and local investments on the Zimbabwe Stock Exchange, said in a third quarter report to clients that a Short Term Economic Recovery Programme (STERP) adopted by the new unity government has had positive impact on the market.

Moves to improve fiscal responsibility, competitiveness and efforts to liberalise prices and exchange restrictions pursued by Finance Minister Tendai Biti all contributed to the positive outlook.

“We cannot rule out an acceleration of economic expansion in the coming years, ahead of the IMF’s long term target,” said the Fund that is marking its footprint in emerging economies across the world, including Africa.

“Zimbabwe’s GDP peaked at US$9 billion and it may take until 2016 to reach this threshold,” Renaissance said.

Renaissance’s prediction of accelerated economic growth comes hard on the heels of a report by the country’s largest business organisation, the Confederation of Zimbabwe Industries, that said capacity utilisation in the key manufacturing sector jumped to 32 percent from about 10 percent in the seven months since formation of the coalition government.

However Renaissance said Mugabe and Tsvangirai must end incessant bickering that is threatening their coalition and that the government must tackle the country’s weak banking system in order to realise anticipated economic expansion.

“The country’s inclusive government continues to be plagued by outstanding issues associated with its founding agreement, including leadership of the central bank and the attorney general’s office, and the establishment of a new constitution that will pave way for further elections,” Renaissance said.

It added: “Although the political noise surrounding these disagreements has intensified in recent months, we do not believe any break in the government is imminent. In our view, the respective parties are bound primarily by their own self interest.” – ZimOnline