By ETimes
HARARE – Zimbabwe’s foreign currency receipts have increased by 9.5% to US$6.15 billion in the first half of 2024 from US$5.61 billion in the comparable period last year, latest data shows.
This growth indicates a strengthening of the country’s foreign currency generation capacity.
There has been a notable increase in foreign currency receipts, primarily from exports and diaspora remittances, which rose by about 10% in the first half of 2024 compared to the same period in 2023.
Export proceeds accounted for 55% of the total receipts, amounting to US$3.41 billion, which represents a 10.9% increase from the previous year. This growth in export receipts is crucial for supporting the balance of payments and enhancing foreign currency availability
Diaspora remittances also contributed significantly, totaling US$997.91 million, which is an 8% increase from the previous year. This steady inflow of remittances plays a vital role in supporting household incomes and overall economic stability.
The total foreign currency receipts include various sources such as export proceeds, international remittances, loan proceeds, and foreign investment. The diversification of these sources helps mitigate risks associated with reliance on a single income stream.
The increase in foreign currency receipts has contributed to a current account surplus of US$19.2 million in the first half of 2024, a significant turnaround from a deficit of US$13.8 million in the same period last year. This improvement reflects the positive impact of enhanced foreign currency inflows on the overall economic health.
“The country’s external sector position has remained favourable notwithstanding the anticipated slowdown in the economy in 2024 due to the effects of the EL-Nino-induced drought,” Reserve Bank of Zimbabwe governor John Mushayavanhu stated in the latest 2024 Mid-Term Monetary Policy Review Statement.
Economic Growth Projections:
The economy is expected to grow by 2% in 2024, mainly driven by the construction, mining, tourism, and distribution sectors. Growth is anticipated to rebound to above 6% in 2025 due to favorable monetary conditions and recovery from the El Nino-induced drought.
Interest Rates:
The Reserve Bank recalibrated the Bank policy rate from 130% to 20%, with a corridor of 11-25%, aligning with the anticipated inflation profile for the Zimbabwe Gold (ZiG) currency. Lending and deposit interest rates have adjusted accordingly.