daniel chigunwe
Business Writer
Zimbabwe’s economy recovered in the second quarter of this year after growth surged by 1,5 percent compared to an 11,1 percent decline in the prior quarter. The growth was mainly driven by accommodation, food services and increased electricity output.
In the first quarter of the year, the economy was weighed down by a decline in electricity production, reduced mineral output, depressed demand for goods and services and a downturn in manufacturing production.
In a statement, the Zimbabwe National Statistics Agency (ZimStat) noted; “The quarter-to-quarter growth rate measures the change in gross value added for successive quarters. The GDP growth rate for the second quarter of 2023 is estimated at 1,5 percent.”
The year-on-year quarterly growth rate, which measures the growth in value-added for a particular quarter in relation to the same quarter in the preceding year saw the year-on-year quarterly growth rate for the second quarter estimated at 4,5 percent.
ZimStat said the tourism sector, which has seen remarkable growth and recovery partly buoyed by the 2023 harmonised elections in August, which saw all major hotels being fully booked in Harare, was the leading contributor to the growth in the second quarter.
“The value added for accommodation and food services is mainly measured by changes in bed occupants for hotels and lodges.
The second quarter of 2023 recorded a surge in bed occupancy resulting in a growth of 58,6 percent,” said ZimStat.
Electricity supply, which registered a significant decline during the first quarter, improved massively in the quarter under review, resulting in the period seeing reduced load-shedding apart from supply interruptions caused by faults.
ZimStats said; “Electricity value added is measured by the quarterly index of electricity production. In the second quarter, electricity production improved by 18,3 percent, benefiting from the technical commissioning of Hwange 7 and 8 thermal power stations.”
Other sectors that contributed to the recovery of the economy in the second quarter included the transport and storage industry, which recorded a growth rate of 12,7 percent, and water which grew by 11,3 percent.
Agriculture grew by 8,1 percent mainly on account of improved output in tobacco, cotton, and horticulture production among others. Growth in construction was estimated from the index of cement sales.
As such, the construction industry recorded a growth rate of 7,7 percent during the second quarter of the year, whilst the mining and quarrying industry expanded by 4,7 percent driven better output in gold, nickel coal, phosphates and granite mining.
On the contrary, some industries registered negative growth which weighed down overall national GDP growth for the period.
Wholesale and retail trade; repair of motor vehicles and motorcycles industry was undermined by value chain short circuits, hence recorded a decline of 6,3 percent.
“Financial and insurance activities value added is estimated by the change in the loan-to-deposit ratio. The ratio declined from 62,1 percent to 55 percent during the second quarter of 2023, resulting in a decline of 10,9 percent,” ZimStat said.
The human health and social work activities which is measured by changes in the number of outpatients recorded by health service institutions declined by 6,4 percent during the second quarter of 2023.
“Other industries that recorded declines are administrative and support service activities (-5,7 percent), professional, scientific and technical activities (-1,1 percent), and public administration and defence; compulsory social security (-0,8 percent) among others,” ZimStat.
Bongani Ndlovu