Trade deficit widened in the First quarter of this year to $784.3 million compared to the $274.0 million recorded during the fourth quarter of 2017 according to the Reserve Bank of Zimbabwe (RBZ) quarterly economic review.
The review also says the trade balance also worsened by 85.3% on a year on year basis, from deficit of US$423.1 million in the first quarter of 2017, to deficit of 784.3 million in the first quarter of 2018.
“The recurrent trade deficits pose significant challenges as the country continues to rely on export revenues to generate liquidity to support domestic economic activity,” the review says.
“In this regard, the need to attract both domestic and foreign investment to rejuvenate industry, make significant competitiveness gains and generate adequate foreign exchange buffers to cushion the economy from external vulnerabilities, remains integral to economic revival efforts.”
Trade deficit worsened despite a 4.5% increase on the merchandised exports from US$848.0 million realised in 2017 first quarter to US$886.1 million of the same period in 2018.
“The increase in exports was mainly driven by improved gold deliveries to Fidelity Printers and Refineries, and hence higher gold export volumes,” RBZ said.
“Compared to the fourth quarter of 2017, exports declined by 27.9% in the first quarter of 2018, largely on account of declines in tobacco and nickel exports.”
The review says gold, ferrochrome, flue-cured tobacco, nickel and platinum dominated the country’s exports, contributing about 81.4% of export earnings during the first quarter of 2018.
Total merchandise imports amounted to US$1,670.3 million, during the first quarter of 2018, a 31.4% increase from US$1,271.1 million realized over the comparative period in 2017.
“The country’s import bill was mainly composed of energy imports (diesel, petrol, aviation spirit and electricity), food, medicines and fertilizers,” RBZ says.
“On a quarter-on-quarter basis, merchandise imports increased by 11.1% to US$1,670.3 million during the first quarter of 2018, from US$1,503.7 million recorded in the fourth quarter of 2017.”
“The increase was largely due to higher imports of fertilizer, unleaded petrol, rice and wheat,” says the quarterly review.
RBZ has been encouraging more exports to boost foreign currency, which is scarce in the country.
The country’s major imports during the period from January to March 2018 comprised cereals (maize, rice, and wheat), energy (diesel, petrol and electricity), medicines and fertilizers according to RBZ.