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Zimbabwe finance minister sticks to 3% growth forecast despite poor rains

Zimbabwe Finance Minister Mthuli Ncube arrives to present the 2020 National Budget at Parliament Building in Harare, Zimbabwe, November 14, 2019. REUTERS/Philimon Bulawayo

HARARE (Reuters) – Zimbabwe’s finance minister maintained on Monday that the country’s economy would grow 3% this year despite poor rains that have hurt some crops and persistent power cuts that have hit mines and industry.

The southern African nation is experiencing its worst economic crisis in a decade, compounded by shortages of foreign exchange, fuel and power as well as a drought last year that has left half the population in need of food aid.

Mthuli Ncube told reporters in the capital that he felt the government undervalued the contribution of the informal sector to the economy. Less than 20% of the working population hold formal jobs.

Ncube said in November the economy, which contracted by 6.5% in 2019, would this year rebound as from agriculture and mining output improved. But many economic analysts expect the economy to worsen.

“We have our own projection of 3%, so you can see that generally there is a feeling that this will be a better year. So we are sticking to our 3% rate of growth,” Ncube said in comments broadcast by a local radio station after a meeting with Chinese officials.

“There is always more activity in the economy than we think.”

The United Nations has warned that Zimbabwe faced another poor harvest this year because of patchy rains.

Ncube has said the government will spend $133 million this year on subsidies for maize meal to keep the price of the most consumed food affordable.

Reporting by MacDonald Dzirutwe, editing by Larry King

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