Major Economic Sectors Decline in the Fourth Quarter of 2019

Major Economic Sectors Decline in the Fourth Quarter of 2019
Harare Streets Image by Ian Mapira

Reserve Bank of Zimbabwe Quarterly Economic Review shows that domestic economic developments in Zimbabwe negatively affected all major sectors of the economy in the fourth quarter of 2019.

The fourth-quarter results show that no major economic sector responded positively to developments that took place last year.

“The challenging operating environment that prevailed during the year under review, constrained economic activity,” the central bank says in the quarterly review.

Major sectors of the economy are estimated to have declined with agriculture recording -18.0%; construction, -14%; electricity and water, -13.9%; mining -11.9% and manufacturing -5.9%.

Agriculture activity was constrained by high costs and poor availability of inputs, and erratic rainfall in the fourth quarter of 2019 according to the RBZ.

“In addition, the late reconfiguration of Command agriculture, to a private sector led scheme, delayed the distribution of inputs at the commencement of the season,” the report reads.

“These factors resulted in a slow start to the season and adversely affected the timely planting of crops.”

Most of the country received below-normal rainfall during the period from October to December 2019 according to the Meteorological Services.

The output of most minerals was lower in the fourth quarter of 2019 compared to the same period in 2018 according to the RBZ report.

Underperformances were recorded for coal, diamonds, ruthenium, phosphate, lithium, chrome, nickel and gold production.

Granite and iridium production, however, performed strongly during the fourth quarter of 2019.

Miners have attributed underperformance to electricity challenges as power generation output declined to 1 238 GWh in the fourth quarter from 1 522GWh in the third quarter of 2019.

Electricity generation fell across all power producers in the fourth 2019, resulting in a decline in output, from 1 522(GigaWatts hours) GWh produced in third quarter 2019 to 1 238GWh.

Merchandise trade developments were however positive in the fourth quarter with a recorded US$195.5 million merchandise surplus up from a US$122.2 million deficit.

“On a quarter-on-quarter basis, merchandise imports for the fourth quarter of 2019 were 9.2% higher at US$1,251.1 million, compared to US$1,145.6 million recorded in the third quarter,” the RBZ review says.

“Merchandise exports stood at US$1,447.9 million in the fourth quarter of 2019, representing a 13.3% decline from US$1,277.8 million realized in the corresponding quarter in 2018.”

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