Trade deficit rises after missed targets in H1

Source: Trade deficit rises after missed targets in H1 – NewsDay Zimbabwe

Finance Minister Mthuli Ncube

Zimbabwe missed its export targets by nearly 6% in the six months to June, with imports higher than predicted and thus pushing up the trade deficit.

Total exports were US$3,3 billion compared to US$3,51 billion projected in the 2022 Mid-Term Budget Review and Supplementary Budget, owing to lower commodity prices in the second quarter.

Total imports for the period under review were also 8% higher than the initial projection of US$3,7 billion, as imports totalled US$4,04 billion as at the end of June.

As a result, the trade deficit at the end of the period under review was about US$530 million.

The new figures are based on newly released data from the Zimbabwe National Statistics Agency (ZimStat).

“Latest trade statistics: The value of total exports in June 2022 was US$666,6 million, signifying an increase of 29,9% from total export earnings of US$513,1 million in May 2022,” ZimStat said, on its official Twitter page on Saturday.

“Imports increased by 4,9% to US$750,5 million in June 2022, from US$715,7 million in May the same year.”

During the 2021 comparative period, total exports and imports were US$2,52 billion and US$3,44 billion, respectively, accounting for a deficit of about US$920 million.

Thus, the deficit for the current half year improved from the 2021 comparative.

In the 2022 Mid-Term Budget Review and Supplementary Budget, Finance minister Mthuli Ncube reported that merchandise exports and imports were US$3,51 billion and US$3,74 billion, respectively.

“Merchandise exports increased by 33% to US$3 516,5 million in the first half of 2022, from US$2 649,7 million in 2021, spurred by increases in agriculture, mineral and manufactured exports,” Ncube said.

“Merchandise imports increased by 15% to US$3 746,8 million in the first half of 2022, up from US$3 249,2 million in 2021, driven by increases in fuel, machinery, and raw material imports.”

The difference between Treasury and ZimStat statistics can largely be attributed to lower-than-expected prices in international commodities for platinum and silver along with other selected minerals and only a slight increase in gold prices during the second quarter of the year.

Zimbabwe’s top mineral exports were negatively affected. For imports, the differences are owing to the continued increase in international prices as a result of supply chain disruptions and most source countries facing record inflationary levels.

Contributing to export and import challenges is the Russia/Ukraine war and slower recovery from the COVID-19 pandemic.

Treasury expects merchandise imports to close the year at US$8,08 billion, a 13,2% increase from US$7,13 billion in 2021, driven by increases in grain, fuel, machinery and raw material imports.

For exports, Ncube said these were envisaged to close the year at US$7,34 billion, a 15,5% increase from US$6,35 billion in 2021.