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PrintDiaspora remittances up 33% in 2010
Zimbabwe's annual deficit might improve sharply in 2011 due to increased exports, but could remain unchanged next year in the wake of possible elections, according to the International Monetary Fund (IMF)’s latest forecasts.
The deficit could narrow this year to 17.5 percent of gross domestic product (GDP) from 18.3 percent of GDP
Zimbabwe's annual deficit might improve sharply in 2011 due to increased exports, but could remain unchanged next year in the wake of possible elections, according to the International Monetary Fund (IMF)’s latest forecasts.
The deficit could narrow this year to 17.5 percent of gross domestic product (GDP) from 18.3 percent of GDP
IMF projections indicate the shortfall remaining flat at 17.5 percent of GDP in 2012, with possible elections later this year and related unrest expected to hamper economic activity. The current account balance in the fourth quarter of 2010 posted a shortfall of $1.1 billion, according to official figures. GDP forecasts this year were put at $6 billion, up from $5.6 billion in 2010.
Finance Minister Tendai Biti has lamented the upsurge in import volumes, as lack of capital to revitalise factory capacity hits local manufactured exports. The Reserve Bank of Zimbabwe data showed some $2.2 billion worth of exports were sold in the last quarter of 2010, while imports soared to $4 billion. Mineral exports rose 143 percent to $1.72 billion in 2010, compared with $708 million in 2009. In 2011, the RBZ has projected mining output would go up by 44 percent, following mining companies’ plans to ramp up production.
Diaspora remittances increased 33 percent in 2010, boosting the current transfers account balance into surplus, but the services balance was subdued despite better tourism earnings, which rose 47 percent last year to $770 million, according to industry figures. The income account has remained in shortfall despite limited repatriation of profits and debt-service payments.
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