Trade deficit narrows 62%

ZIMBABWE recorded a trade deficit of $605 million between February and July this year, down 62% compared to the same period last year.

Figures released by the Zimbabwe Statistics Agency (ZimStat) show that between February and July, the country imported goods and services worth $2,41 billion against exports of $1,80 billion.

Trade figures for January 2018 are still not available as the Zimbabwe Revenue Authority, which is the source of merchandise trade data, has not produced them, according to ZimStat.

In the same period last year, imports stood at $3,54 billion and exports at $1,96 billion, giving a trade deficit of $1,58 billion.

Exports dropped by 8% on the prior year figures, while imports fell by 32%.

Analysts, however, attributed the decline in imports bill to foreign currency shortages as well as a drop in the budget deficit.

"A drop in imports could be attributed to foreign currency challenges. This could be good in the sense that it re-balances the fiscal position," economic analyst Persistence Gwanyanya said, adding it could be better if a decline in imports was due to import substitution.

He said a drop in exports could be attributed to the performance of the gold sub-sector which, for the first 6 months, missed its target by about 20%.

"There were challenges with fuel and electricity. Remember, small-scale miners depend largely on fuel for their operations," he said.

In the period under review, all import drivers like electricity, diesel, petrol and soyabeans recorded a drop. For instance, the electricity bill dropped by 76% to $26 million, diesel by 6% to $498, petrol 19% to $217 million while soyabeans fell by 43% to $41 million.

Major foreign currency earners like gold, tobacco, nickel mattes and ferrochromium also dropped. Only nickel ores, concentrates and diamond recorded an increase.