BOP cause for concern – analysts

HARARE - The country's balance of payments (BOP) position is a cause for concern, market analysts have said.
In separate interviews with The Zimbabwean the analysts pointed out that while Zimbabwe continued to make headway trying to bring the nation back to economic sanity after a decade of negative growth and investment, the trade deficit continued to worsen.

Zimbabwe’s exports grew by 63 percent to $2,2 billion year-on-year for the period January 1, 2010 to December 31, 2010.

Nonetheless, the trade deficit worsened to $278,1 million in 2010 from $106,8 million in 2009.

Stockbrokers contacted said the deficit amounted to 13 percent of total exports in 2010 and 8 percent in 2009.

“Mining and services contributed the bulk of imports at 32 percent and 35 percent, respectively,” a stockbroker said.

“Imports are likely to increase given the firm oil prices and the need to import grain. The terms of trade worsen impacting of the Balance-of- Payments.”

Since dollarisation of the economy in February, 2009, Zimbabwe’s economy has taken on a new lease of life.

“With much more at stake, the jostle for political power has intensified, and the policy disagreements seem as insoluble as ever,” the stockbroker said.

Notwithstanding, the strength of the country’s infrastructural and systematic development has shown through in that even after a decade of disinvestment, deterioration and decay, within a relatively short period of time, there has been a dramatic revival of economic activity, clearly perceptible in corporate earnings statements.

“Following the stabilisation/normalisation phase in 2009/10, the growth engine has shifted up a couple of gears and is now accelerating forwards. It is a matter of time before the market re-rates to reflect what is happening on the ground,” he added.

Post published in: Economy

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