Fitch Solutions Forecasts Widening Trade Deficit for Zimbabwe
Fitch Solutions projects Zimbabwe's trade deficit will increase to 2.4% of GDP in 2022, driven by rising fuel prices and informal economic activity. This widening deficit poses challenges amid insufficient export growth and anticipated declines in global commodity prices.
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Fitch Solutions has revised its trade deficit forecast for Zimbabwe to 2.4% of GDP for 2022, up from 2.2% in 2021. The increase is attributed to a surge in informal trade activities and rising fuel prices, with fuel imports last year costing US$856.8 million, 13.13% of total imports.
The easing of Covid-19 restrictions is also likely to heighten demand for imports. In 2021, foreign payments totaled US$6.99 billion, a 45.2% rise from 2020. Despite anticipated inflation reduction, the trade deficit may be exacerbated by falling commodity prices, particularly gold, coal, and platinum. The mining sector's performance could further influence the trade balance.
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