After a prolonged period of collapse the economy started to recover in 2009-10, albeit from a low base: although data vary widely, it is generally estimated that Zimbabwean GDP shrank by more than 40% between 1998 and 2009. However, most fresh investment is taking place in the mining sector-which is driven by commodity prices-while growth in 2011 is likely to be affected negatively by business and political uncertainty and supply-side constraints, notably power shortages and the scarcity and cost of bank credit. Business confidence is being damaged by the sense of governmental drift, uncertainty over the likely election timetable and continued confusion about legislation requiring 51% local ownership of all enterprises. A good cropping season will help to underpin growth, but structural problems in the core agricultural sector remain, and overall growth is likely to moderate to around 3.3% in 2011. Prospects are likely to be substantially gloomier if elections are held this year. The government's willingness to pursue policy reforms will lessen in the run-up to polls, while political and business uncertainty will increase. Growth could be much lower, or even negative, if the election process proves violent.

Growth prospects for 2012 will largely be determined by the conduct and outcome of any elections. In a best-case scenario polls would be conducted under international supervision and would reflect the will of the people-which would most probably equate to an MDC victory. This would open the way for substantial foreign aid and more business-friendly economic policy, thus fuelling more rapid economic growth. At the other end of the spectrum, elections that are-or are perceived to be-neither free nor fair would depress business and investor sentiment still further (outside site-specific sectors such as mining), and could push Zimbabwe back into recession.