RBZ, Treasury bullish on Zim economy

Business Reporter

Zimbabwe’s economy is on a positive growth trajectory as evidenced by robust foreign currency inflows and a projected current account surplus, statistics shared by both the Reserve Bank of Zimbabwe (RBZ) and the Ministry of Finance, Economic Development and Investment Promotion show.

According to RBZ Deputy Governor Dr Innocent Matshe, the country’s foreign currency generation capacity has remained strong, with a 17,9 percent increase in foreign currency receipts to US$10,03 billion during the first nine months of 2024 compared to US$8,5 billion the same period in 2023.

This growth is primarily attributed to increased export earnings of US$5,91 billion and diaspora remittances of US$1,56
billion, said Dr Matshe in a presentation at a 2025 Pre-Budget Seminar in Bulawayo on Wednesday.

The strong performance in the balance of payments is expected to sustain a current account surplus throughout 2024 and 2025, according to Dr Matshe.

Speaking at the same seminar, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube highlighted the growth in Zimbabwe’s export capacity, which increased from US$4,7 billion in 2018 to US$7,2 billion in 2023.

The projected export figure for 2024 is US$7,3 billion, driven by key minerals such as gold and platinum group metals (PGMs), said Minister Ncube.

However, the economic growth has also led to increased demand for imports, particularly raw materials, fuel and consumables.

While imports rose from US$4,5 billion in 2019 to US$8,7 billion in 2023, the Government anticipates an increase to US$9,3 billion by the end of 2025.

Minister Ncube believes the growth in imports is positive as it relates to importation of key raw materials, fuel and other consumables used in production.

Merchandise imports increased by 4,4 percent from US$6,3 billion in the first nine months of 2023 to US$6,5 billion during the same period under review.

Merchandise imports are expected to reach approximately US$9,3 billion by the end of 2025, reflecting an increase of 2,5 percent from the 2024 projection of US$9,1 billion.

The overall foreign currency inflows were buoyed by remittance inflows, with diaspora remittances reaching US$1,56 billion, while non-governmental organisation (NGO) remittances reached US$873 000.

Remittance inflows are expected to remain resilient, with a projected increase of 14,9 percent to US$2,48 billion in 2024, from US$2,16 billion in 2023.

This positive trend is expected to continue into 2025, with remittances projected to reach US$2,51 billion.

The country also received loan proceeds amounting to US$1,26 billion.

Minister Ncube said secondary income inflows are anticipated to remain resilient and drive the current account, with personal transfers expected to rise from US$2,48 billion in 2024 to US$2,51 billion in 2025.

The current account balance is projected to improve from US$133,9 million in 2023 to US$150,5 million in 2024 and further to US$277,4 million in 2025.

While the economic outlook appears promising, the Government acknowledges potential challenges such as commodity price shocks and drought.

However, the strong performance of the gold sector and resilient remittance flows are expected to mitigate these risks.

The Government’s focus on export promotion, import substitution and bid to attract foreign direct investment is expected to further bolster the economy and enhance its resilience.