Zimbabwe trade deficit narrows Zimbabwe’s trade deficit narrowed significantly in January 2024, on account of growth in exports of gold and tobacco, and a decline in imports (File Picture)

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Zimbabwe’s trade deficit narrowed in January 2024 due to increased exports of gold and tobacco and lower imports, while February saw inflation soften slightly as the exchange rate stabilised, leading to a modest price increase, according to statistics released by the Zimbabwe National Statistics Agency (ZimStat).

The country saw a softening of inflation by 1,2 percent as the exchange rate moved in a narrow band affecting prices marginally, resulting in a 5,4 percent increase in prices.

“The month-on-month inflation rate was 5,4 percent in February 2024, shedding 1,2 percentage points on the January 2024 rate of 6,6 percent. This means that prices as measured by the all-items CPI, increased by an average of 5,4 percent between January 2024 and February 2024,” ZimStats noted.

Month-on-month inflation was composed of the beverages inflation rate which was 9,8 percent, shedding 5,2 percentage points on the January 2024 rate of 15,0 percent whilst the non-food inflation rate was 3,0 percent, gaining 0,5 percentage points on the January 2024 rate of 2,5 percent.

In the month under review, the year-on-year inflation rate for February 2024 as measured by the all-items Consumer Price Index (CPI), was 47,6 percent.

“This means that prices as measured by the all-items CPI, increased by an average of 47,6 percent between February 2023 and February 2024. Data on prices were collected during the period 12th to 16th February 2024. Hence, the changes in prices in this report refer to that period of data collection,” the agency said

According to ZimStats, the Food Poverty Line (FPL) for one person in February 2024 was $432 454,90.

This is the amount of money an individual needed to buy food and it represented an increase of 178,4 percent over the January 2024 figure of $155 360,39.

The Total Consumption Poverty Line (TCPL) for one person was $552 745,80 in February 2024.

“This means that an individual required that much to purchase both non-food and food items as of February 2024 in order not to be deemed poor. This represents an increase of 177,8 percent when compared to the January 2024 figure of $198 981,37,” the agency stated.

Trade deficit narrowed significantly in January 2024, thanks to a boost in exports of gold and tobacco and decline in imports.

A trade deficit is an economic condition when a country imports more goods than it exports. The trade deficit equals the value of goods imported minus the value of goods exported. If a country exports more goods and services than it imports, it has a trade surplus.

During the period under review, the total value of exported goods in January was US$540,3 million, a slight decrease of 1,9 percent compared to December 2023. However, imports fell at a much steeper rate, dropping 15,2 percent to US$692,7 million from US$817 million in December.

This resulted in a January 2024 trade deficit for goods of US$152,4 million, a significant 42,8 percent decrease from the US$266,3 million deficit recorded in December 2023, the latest figures show.

Industrial supplies comprised 91 percent of the goods exported in January 2024, followed by food and beverages.

Tobacco, semi-manufactured gold, and nickel ores and concentrates dominated Zimbabwe’s exports in January while South Africa, United Arab Emirates and China were the top three export destinations, collectively accounting for roughly 71 percent of the total export value of US$540,3 million.

Fuels and mineral oil products, machinery and mechanical appliances and cereals were the major import categories, while vehicles also featured prominently.

South Africa and China were the leading source countries for imports, contributing 52,4 percent of the total import value.

The report highlights the significant role of tobacco and gold in Zimbabwe’s export economy. In addition, the strong trade ties with South Africa and China are evident in both export and import activities.

In February this year, the country saw a softening of inflation by 1,2 percent as the exchange rate moved in a narrow band affecting prices marginally, resulting in a 5,4 percent increase in prices.

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