Zimbabwe trade deficit narrows in first two months of 2016

Zimbabwe trade deficit narrows in first two months of 2016

HARARE, March 17 (The Source) – Zimbabwe’s trade deficit stood at $380 million in the first two months of 2016, narrowing from $466 million in the same period last year, reflecting still depressed domestic production, weak commodity prices and declining capacity to import, latest official figures show.

Figures released by the Zimbabwe Statistical agency (Zimstat) on Wednesday revealed that the country imported goods worth $839 million in January and February 2016, against exports valued at $459 million in the same period.

In the first two months of 2015, the country’s import bill reached $994 million, against imports of $527,8 million, according to central bank statistics.

The country registered an annual trade deficit of $3,3 billion in 2015, about a fifth of its GDP.

Market experts say continued decline in the country’s industrial capacity due to ageing equipment and high labour costs coupled with the strengthening of the United States dollar against regional countries are some of the factors underlying Zimbabwe’s trade gap.

Topping the list of imported products during the period under review were products such as maize, rice and crude oil while tobacco, minerals and wood products were the major exports.

“The country’s balance of payment position remains precariously difficult at a time when growth in manufactured exports is slow while the country has insufficient foreign currency reserves at its disposal to finance the current account deficit,” said an economist with a local bank.

Zimbabwe is exposed to external shocks due to the fragile global economy and its heavy reliance on commodities.