adminThe country’s trade deficit in the two months to February declined 9,4 percent to $495,77 million from $547,26 million in the comparative period a year ago.
Imports were at $966,3 million from $1,1 billion, a 12,6 percent decline largely due to the prevailing liquidity crisis, weak aggregate demand and the closure of companies which import raw materials. The decline in imports is also attributed to trade barriers introduced by Government at the beginning of the year. Exports were at $470,53 million, shedding 15,7 percent from the same period last year.
According to the latest statistics from ZimStat, in January imports declined 15 percent to $487,5 million from $576,6 million. The situation deteriorated in February with import levels dropping 2 percent to $478,41 million.
The trade gap is expected to continue narrowing for the remainder of the year as the country’s ability to pay for imports is shrinking fast. According to the figures, the biggest declines in imports were recorded in the agriculture and food category. Dairy imports were 21 percent lower to $2,5 million from $3 million.
South Africa remained the biggest trading partner accounting for 60 percent of the imports while it also absorbed 58 percent of the exports.
According to Treasury’s state of the economy report for February, the manufacturing sector remained under pressure, with a number of companies facing acute financing challenges. A total of 15 companies in the metals and engineering subsector were reported to have closed.
Sales of consumer goods were also reported to have fallen by 25-30 percent during the month, reflecting intensification of the liquidity crisis in the economy. Mineral output remained depressed during the month of February 2014, with gold and nickel registering significant declines. However, output for chrome, platinum, palladium and rhodium improved during the month.
Gold output decreased from 926,8kg in January to 831,3kg in February. This was mainly on account of production slippages from large scale producers. Production from small-scale producers increased to 190,3kg from 161,9kg in January bringing the total for the two months to 352,2kg.
Similarly, nickel output for the month slightly decreased to 1 557 tonnes from 1 559 tonnes produced in January 2014. However, platinum output increased marginally from 1 015kg in January to 1 044kg this month. Reflecting increased platinum output, production for the other platinum group of metals such as palladium and rhodium increased from 809kg and 93kg in January 2014 to 832kg and 96kg, respectively, in February. Chrome output also increased from 28 207 tonnes in January to 36 794 tonnes in February, benefiting from increased capacity utilisation at ZIMASCO
Imports of finished goods such as sugar, cooking oil and laundry soap under the general import category continued to flood the market, reflecting increased incidences of smuggling as well as the use of fake import licences.
The finance ministry said the strengthening of the US dollar against currencies of the major trading partners also made imports much cheaper with some landing at below margin prices, exerting pressure on locally manufactured goods. — FinX.
Online Reporter