The new year holds bleak prospects for the overwhelming majority of Zimbabweans reeling under world-record inflation and a meltdown that shows no sign of easing, economists say.

"The year 2007 is bad news already before we have even started it," economist John Robertson told AFP dismissing projections by Finance Minister Herbert Murerwa that Zimbabwe's four-digit inflation would drop in 2007.

Eric Bloch, a respected economist who runs an independent financial consultancy, said: "The first half of the coming year will be markedly worse than 2006.

"Inflation will continue to rise, there will be extensive foreign currency shortages and a further contraction in employment."

Bloch said inflation would subside in the second half but the decline would not be spectacular.

Zimbabwe is in the seventh year of an economic recession which culminated in a more than 1000 percent inflation rate in 2006, unemployment of more than 70 percent and perennial shortages of basic goods like fuel and cooking oil and staples.

Announcing the 2007 national budget last month, Murerwa said: "The economy is projected to grow marginally by between 0.5 to one percent in 2007."

He said annual inflation which stood at 1098 percent in November would recede to between 400 and 350 percent in the latter half of 2007. He attributed the projected change of fortunes to "good weather, stabilising of commodity prices, improved mineral deposits and growing number of tourist arrivals."

'No quick fix for self-inflicted problems'

Despite various projects to halt the spiral, including a drive to woo new friends among Asian countries after being shunned by the West due to President Robert Mugabe's policies, the government appears far from winning the battle.

"Most of the problems facing the economy are a result of self-inflicted damage we did ourselves and there is no quick way to fix it," Robertson said.

He said the economic woes stemmed from the government's controversial and often haphazard land reforms in which the state seized at least 4000 farms from white commercial farmers for redistribution to landless blacks.

"We don't have the money we used to earn from beef and tobacco any more. If the government changes some of its policies we might get loans from those who are holding back because of the bad policies."

Mugabe said in his end-of-the-year address in parliament that the country's economy was recovering as a result of the National Economic Development Priority Programme and the "Look East" policy to forge closer links with Asia.

The NEDPP was launched in April to resuscitate the economy by generating foreign currency and promoting tourism, but analysts say the blueprint has so far failed to end the country's economic woes.

Zimbabwe launched the Look East policy nearly four years ago to buttress political and economic relations with Asian countries such as China and Malaysia after the country's former Western allies turned their backs on Mugabe's government.

Extended term for Mugabe

Zimbabwe Congress of Trade Unions (ZCTU) secretary general Wellington Chibebe said calls by Mugabe's supporters for the extension of the veteran ruler's term by another two years in 2008 would also scuttle efforts to mend fences with the country's former trading partners.

Zimbabwe's relations with the EU and the United States were strained following presidential polls in 2002 which the main opposition as well as western observers charged were rigged to hand Mugabe victory.

"The ruling ZANU-PF failed to resolve its succession issue at its conference two weeks ago and the resolution to extend Mugabe's term is going to cause a negative attitude on co-operating partners who were willing to help," Chibebe said.

He said the labour body which has led several anti-government protests including one brutally crushed by police in September, would "employ both dialogue and action" to press the government next year to address the plight of workers living below the poverty threshold.

AFP