Zimbabwe halves 2016 growth forecast, budget deficit widens

HARARE (Reuters) – Zimbabwe’s economy will grow by 0.6 percent in 2016, half the previous forecast, but will recover next year, Finance Minister Patrick Chinamasa said in a budget speech on Thursday.

Chinamasa said the budget deficit for the 2017 fiscal year was estimated at $400 million, equivalent to 3 percent of GDP, up from 1.1 percent in this year.

In addition, Zimbabwe expects its 2016 fiscal budget deficit to widen to $1.18 billion, nearly eight times more than it forecast a year ago, Finance Minister Patrick Chinamasa said in a budget speech.

Chinamasa had pencilled in a deficit of $150 million in November 2016, equivalent to 1.1 percent of GDP, and said it would be financed via domestic borrowing.

The southern African nation is grappling with a devastating drought that has left more than 4 million people facing hunger, while the worst financial crisis in seven years has fuelled some of the biggest anti-government protests in a decade.