Trade deficit rises 4% y-on-y at $1,83 billion
TRADE data released by the ZimStat Wednesday shows that Zimbabwe’s total trade for the half year to June marginally grew to $4.29 billion from $4.22 billion recorded in the same period last year, an increase of 1.72%, but it is still in heavily skewed in favour of imports after the deficit rose almost 4% to $1.83 billion from $1.76 billion.
The marginal growth of total trade recorded in Zimbabwe is in line with forecast growth in world trade of 1.94% on the back of economic uncertainty in Latin America and declining commodities prices have also worsened the situation. However the marginal growth in trade in Zimbabwe is on the back of declining aggregate demand and liquidity challenges in the local economy.
According to the Zimstat data, Zimbabwe recorded $3.06 billion and $1.23 billion in total imports and exports respectively for the period of January to June 2015 against imports of $2.99 billion and exports of $1.22 billion recorded in the same period last year. For the month of June imports were $555 million while exports were $192.9million. The country continues to widen its trade deficit which currently stands at $362.1 million for the month of June 2015 or $1.8billion for the first half of the year.
Imports remain heavily skewed towards consumption as there has been a drop in the importation of raw material as industries capacity to pay remains constrained. The data also show the country is overly reliant on primary products which do not contribute significantly to export earnings. Analysts point to the need to come up and implement an industrialisation policy that tip toes with the government’s ZimAsset programme particularly on value addition and beneficiation.
South Africa continues to be the leading trading partner with total trade between the two countries for the month of June being $314.5million representing 42% of total trade of $747.9million. Zimbabwe imported goods and services worth $203.3 million from its southern neighbour while the country exports were $111.2million. Total trade with SADC countries including South Africa was $432million or 57.8%.
Despite the country’s Look East Policy, trade continues to be one sided with Zimbabwe recording a trade deficit with India and China the biggest trading partners in the East. Zimbabwe imports from India and China were $47 million and $48.6million respectively while exports from Zimbabwe to the two countries are not even adding up to $160 000.
For the month of June the country’s major export products were gold at $53.8million followed by tobacco at $27.3 million. Nickel ore exports were $19.8 million. Diamonds which were at one point supposed to anchor economic growth are in fourth place with exports of $17.6 million to the markets in the UAE and Belgium. Ferrochrome and sugar were next at $16 million and $12.8 million respectively. For the six months to June total gold exports were $305.4 million and tobacco exports were $278.6 million.
The data shows that Zimbabwe mostly relies on primary products with exports totalling 81.2%. In terms of sectors, the extractive sector dominates with mineral exports of $115 million representing 59.5% of the total exports.
In terms of imports the major products were Fuels and Lubes, with the country importing $120.2 million. The huge import bill is yet to see the benefits of mandatory blending which most analysts said would result in some savings on fuel imports.
In June, Zimbabwe imported all type of vehicles worth $50 million while maize and edible oil imports were $14.9million and $12.1million respectively. The country imported wheat worth $9.2million and rice imports were $8 million. The country’s leading import partners outside of South Africa were Singapore at $103.3 million followed by China at $48.6million. Imports from India were $47 million while imports from Zambia and Mozambique were $27.2million and $20 million respectively. FinX