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Zimbabwe Economy on Course to Grow 9.3% This Year, Biti Says

July 26 (Bloomberg) -- Zimbabwe Finance Minister Tendai Biti said the economy is on course to expand 9.3 percent this year, while inflation would probably meet the 4 percent target.

Agriculture will expand 19.3 percent, while mining output leaps 44 percent, Biti said in his midterm budget statement to lawmakers in the capital, Harare, today.

The government will need an extra $700 million in revenue by the end of the year, he said, compared with the $500 million fiscal deficit he forecast on July 13. To narrow the shortfall, the government needs to eliminate 75,000 so-called ghost workers, who don’t do any work and are on the payroll, Biti said. It also needs to raise more funds from diamond sales.

“It is worrying to note that there is no connection whatsoever between diamond exports made by Zimbabwe and the revenue realized,” Biti said. “We need to put in place proper mechanisms to monitor the movement of the diamonds from the point of mining, marketing, export and trade.”

The government plans to spend $2.7 billion and generate revenue of $2.25 billion this year, according to the budget presented in November. Employee wages consume more than 70 percent of the national budget, Biti told the state-controlled Herald in February.

The International Monetary Fund said June 16 that the inflation rate in Zimbabwe may reach about 7 percent by December, up from 2.9 percent last month.

The Movement for Democratic Change, of which Biti is a member, shares power with President Robert Mugabe’s Zimbabwe African National Union-Patriotic Front.

To contact the reporter on this story: Brian Latham in Johannesburg at blatham@bloomberg.net.

To contact the editor responsible for this story: Philip Sanders at psanders@bloomberg.net.

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