Business / Economy
Zimbabwe's trade deficit widens, more imports to exports
10 Jul 2011 at 14:35hrs | Views
Zimbabwe's trade balance for the first five months of the year has grown wider than expected with an import bill of US$2.8 billion against exports of about US$1.6 billion amid calls for increased industrial production.
Although economic indicators depicted in government's economic update for January to May 2011 show that strong performance in the agriculture and mining sectors have put the country on course to meet a 9.3% growth rate, imports have grown faster than anticipated.
As of May 2011 the country's imports stood at US$2.8 billion up from around US$2.6 billion during the same period last year.
Exports reached US$1.6 billion compared to US$1.1 billion from January to May 2010 and US$848 million in 2009.
Economic analysts say low industrial capacity is responsible for the wide trade deficit.
"When you look at imports exceeding exports by a large amount this creates a negative trade balance. It's a sign of overheating of the economy and what it calls for are supportive policies for the export sector," said Mr. Brains Muchemwa.
"We have to import because we need to consume, this why we have always said we need to increase our capacity utilisation," Mr. Clifford Sileya said.
An outlook report recently produced by the Finance Ministry contends that imports are growing faster, posing a challenge to the financing of the current account balance.
Analysts believe more production is required in order to ease import pressure that can significantly erode liquidity on the local market.
Although economic indicators depicted in government's economic update for January to May 2011 show that strong performance in the agriculture and mining sectors have put the country on course to meet a 9.3% growth rate, imports have grown faster than anticipated.
As of May 2011 the country's imports stood at US$2.8 billion up from around US$2.6 billion during the same period last year.
Exports reached US$1.6 billion compared to US$1.1 billion from January to May 2010 and US$848 million in 2009.
"When you look at imports exceeding exports by a large amount this creates a negative trade balance. It's a sign of overheating of the economy and what it calls for are supportive policies for the export sector," said Mr. Brains Muchemwa.
"We have to import because we need to consume, this why we have always said we need to increase our capacity utilisation," Mr. Clifford Sileya said.
An outlook report recently produced by the Finance Ministry contends that imports are growing faster, posing a challenge to the financing of the current account balance.
Analysts believe more production is required in order to ease import pressure that can significantly erode liquidity on the local market.
Source - Byo24News
