UPDATE 1-Zimbabwe sees 8.9 pct growth in 2013


(Adds detail, background)

HARARE, Oct 12 (Reuters) - Zimbabwe's economy is projectedto grow 8.9 percent next year if the political environmentremains stable and the government lives within its expendituretargets, the finance ministry said on Friday in a pre-budgetstatement.

Uncertainty over the date and conduct of elections duewithin the next year is casting a shadow over the economy givenZimbabwe's recent history of violent and disputed polls.

Finance Minister Tendai Biti is due to present the budget toparliament on Nov. 15.

In July, Biti, a senior member of Prime Minister MorganTsvangirai's Movement for Democratic Change (MDC), slashed his2012 growth forecast to 5.6 percent from 9.4 percent due to apoor harvest and a lack of donor funding andinvestment.

The finance ministry statement said inflation, which hasremained in single digits since Zimbabwe adopted foreigncurrencies in 2009, would average 5 percent next year.

Consumer inflation slowed to 3.63 percent in August from3.94 percent previously.

The government projects that revenues should grow to $3.8billion next year from an expected $3.4 billion in 2012 asauthorities crack down on corporate tax defaulters.

After a decade of steep economic decline and hyperinflation,Zimbabwe's economy has been growing since the formation in early2009 of a unity government between Tsvangirai and veteranPresident Robert Mugabe.

In its annual review of the Zimbabwean economy, theInternational Monetary Fund said growth should moderate over themedium-term to average about 4 percent, although poor powersupply and tight liquidity conditions could pose problems.

The southern African country also carries a huge debt burdenthat is preventing it from securing new aid. Its total externaldebt was estimated at $10.7 billion, or 113.5 percent of GDP, atthe end of 2011. Of this, more than half is in arrears.

(Reporting by MacDonald Dzirutwe; Editing by Ed Cropley)

((macdonald.dzirutwe@thomsonreuters.com)(+263 4 799112)(Reuters Messaging:macdonald.dzirutwe.thomsonreuters.com@reuters.net))


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