Economists Call for Structure as Zimbabwe Trade Deficit Surpasses $3.7 Billion
Economists and market watchers in Zimbabwe are closely observing the ever-expanding trade deficit and have suggested that the government take action. According to Daily News Live, economists originally predicted that the trade deficit would peak at $3 billion. However, in June the deficit approached the predicted overall deficit measuring in at $2.37 billion. In August, the deficit rose to $3.02 billion and in October stood at 3.76 billion.
While imported good account for roughly $6.55 billion, exports barley match totaling $2.78 billion. The trade industry, Daily News Live wrote, is lacking in operation meeting less than 50 percent of its capacity.
“It is a major cause for concern that we continue to witness the increase in the trade gap. Imports have continued to outpace the exports and there is urgent need for reviving the export sector,” a local bank economist said in the report.
“We are now a warehouse for everything that is being produced abroad from sweet potatoes, tomatoes to okra,” Finance minister Patrick Chinamasa added, noting that the government is moving forward with measures that will halt excessive cheap imports.
According to Daily News Live, the AfDB has also instructed the country to limit importation — a strategy to further narrow the trade deficit. In addition, the finance ministry may encourage heightening duty on locally produced agriculture products.
The report quoted an AfDB economic statement which outlined trade deficit recuperation through currency retention:
“Given that total imports already constitute about 52 percent of their projected value in 2013, there is need to contain them as the year progresses to ensure that the targeted value is achieved.”
Zimbabwe’s mineral outputs have encouraged South Africa to remain the country’s largest trade partner, contributing $3.17 billion to imports and $2.04 billion to exports, Daily news Live reported.