QUARTERLY
ECONOMIC
REVIEW


RESERVE BANK OF ZIMBABWE

CONTENTS

STATISTICAL TABLES

List of Figures

List of Tables

FOREWORD

In response to requests by stakeholders and also in line with practices in Central Banks the world
over, Reserve Bank of Zimbabwe (RBZ) is resuming the publication of a Quarterly Economic
Review. The RBZ is pleased to resume this important Publication, which will provide a quarterly
dimension to the existing Weekly and Monthly reports, as well as the Annual Report. It is
anticipated that, from time to time, the Bank shall be including research and other feature papers
in the Review, so as to steer debate, and share information with interested stakeholders among the
readership.
This Publication is, however, being launched against the backdrop of a number of macroeconomic
and social challenges, including liquidity constraints, company closures and retrenchments, being
symptomatic of major underlying difficulties of both structural and institutional nature in the
economy. Since the adoption of the multiple currency framework in 2009, the early gains of the
nascent recovery witnessed in 2009 to 2012, have been slowly reversed. Economic growth has
slowed down significantly from an average of 10.5% over the period 2009 to 2012, to an estimated
4.5% in 2013 and is projected to decline further to around 3.1% in 2014.
Government is, however, taking bold steps to arrest further economic decline and has set a
recovery tone through the introduction and implementation of the Zimbabwe Agenda for
Sustainable Socio-Economic Transformation (ZimAsset). ZimAsset, which has adopted a cluster
approach to economic development, is underpinned by specific measures to revive the economy
through ensuring food security and nutrition; social services and poverty eradication; resuscitation
of infrastructure and utilities; and value addition and beneficiation. There is, therefore, need for all
stakeholders and indeed the whole nation, to rally behind this economic blueprint, to ensure
success of the implementation and realization of its key objectives. The RBZ adopted as its
strategic foundation, a “Back to Basics” approach. This strategy implies that the operations of the
Bank are consistent with the role of Central Banking.

Within our “back to basics” philosophy, the Central Bank fully supports Government efforts to
revive the economy, and will continue to aggressively play a facilitative and advisory
responsibilities.
This Review covers macroeconomic developments and performance of the economy, over the first
half of 2014, highlighting major underlying economic and social challenges that need urgent
redress, in order to get the economy back on track.

DR. J. P. MANGUDYA
GOVERNOR

EXECUTIVE SUMMARY

Global economic growth is projected to increase from 3% in 2013 to 3.6% in 2014, spurred by
recovery in advanced and developing economies. In advanced economies, economic growth is
expected to increase on the back of moderated effects of fiscal consolidation, improved labor
market conditions and supportive monetary conditions. In emerging markets and developing
economies, growth is projected to pick up gradually, supported by stronger external demand from
advanced economies.

The domestic economy continues to face a number of challenges, including persistent liquidity
shortages; declining production and output levels across key sectors of the economy; low foreign
direct investments (FDI) and external lines of credit; widening current account deficit; limited
fiscal space; and energy shortfalls. In addition, the business operating environment remains
difficult, particularly in view of the negative perceptions around the interpretation and
implementation of the indigenization and economic empowerment regulations. The negative
perceptions have also adversely affected the country’s Ease of Doing Business Index rating.

Consumer price developments indicate that inflation was in negative territory for the months of
February, March, April, May and June 2014. Deflationary pressures have, however, been
dissipating since April 2014. Annual headline inflation stood at -0.08% in June 2014, gaining
0.11% on the May 2014 rate of -0.19%. The marginal rise in inflation experienced during the
second quarter of the year, if sustained over a period of time, could result in the economy moving
out of deflation.

Fiscal performance remained under considerable pressure, exacerbated by the general slowdown
in economic activity and inherent liquidity shortages. Monthly revenues for the period January to
June 2014 fell short of targets, with non-discretionary expenditures increasing.

Broad money growth continued to show signs of weakening, reflecting the general slowdown in
the economy, as well as the difficult balance of payments situation. In tandem with the declining
growth in broad money supply, credit to the private sector declined, reflecting the slowdown in

lending by banks due to liquidity constraints and the increase in non-performing loans. The ratio
of non-performing loans to total credit in the banking sector increased to 18.49% in June 2014,
from 14.51% in June 2013.

As at end of June 2014, lending rates ranged between 6% and 35%, with most banks quoting rates
around 20% per annum. The level of interest rates quoted by banks, in large part, reflected
individual banks’ liquidity positions and their cost of funds.

On the Zimbabwe Stock Exchange, the industrial index increased by 5.8%, from 176.32 points in
March 2014 to 186.57 points in June 2014, largely on the back of news that the Government would
be reviewing the indigenization and economic empowerment policy. The mining index also firmed
to 61.32 points in June 2014, from 29.51 points in March 2014, representing a 107.8% increase.

The country’s external sector position remained difficult, on account a growing import dependence
against subdued export performance. The continued closure of some companies, declining
industrial capacity utilization, and loss of competitiveness have combined to further widen supply
gaps in the economy and resulted in increased demand for imports.

1. GLOBAL ECONOMIC DEVELOPMENTS

According to the IMF World Economic Output report of April 2014, global economic growth is
projected to increase from 3% in 2013 to 3.6% in 2014, spurred by recovery in advanced and
developing economies. The adverse effects of a severe winter in the U.S. and the Euro-Area in the
first quarter of 2014, coupled with financial market volatility and political instability in Russia and
Ukraine, however, weighed down global economic activity during the first half of 2014.
In advanced economies, economic growth is expected to increase from 1.3% in 2013 to 2.2% in
2014, on the back of moderated effects of fiscal consolidation, improved labour market conditions
and supportive monetary conditions. Growth will be strongest in the United States, where it is
projected at 2.8 % for 2014, compared to 1.9% in 2013. There were concerns earlier in the year
that tapering of the stimulus package by the US Fed would weigh down on growth. The US
government highlighted that economic recovery was well entrenched and there was no need for further
support in the form of quantitative easing. The tapering policy, however, would largely depend on how
the economy will respond to the policy in order to prevent the economy from sliding back.
In the Euro area, a growth of 1.7% is projected for 2014, compared to 0.5% in 2013. This growth
is, however, unevenly distributed across the economies in the region. This is largely because
economic activity is expected to remain stronger in the core economies of Europe but weaker in
periphery countries, on the back of high debt and financial fragmentation which are adversely
affecting growth and domestic demand. Monetary easing, however, is required to sustain economic
activity in the Euro area in order to achieve the European Central Bank’s price stability objective,
by lowering risks of even lower inflation or outright deflation.
In emerging markets and developing economies, growth is projected to pick up gradually, from
4.7% in 2013 to 5% in 2014, supported by stronger external demand from advanced economies.
Nonetheless, tight financial conditions are expected to dampen domestic demand and moderate
economic growth prospects. In China, growth is projected to remain at 7.5% in 2014, as authorities
seek to ensure a gradual transition to a more balanced and sustainable growth path. Overall,
financial conditions have tightened further in some emerging market economies, resulting in an
increase in the cost of capital. This is expected to further dampen investment and weigh down on
growth.

In Sub-Saharan Africa, growth is expected to increase modestly from 4.9% in 2013 to 5% in 2014,
underpinned by commodity-related projects. Many African countries have succeeded in
maintaining strong growth, partly due to improved macroeconomic policies.
In the SADC region, growth is projected to remain at about 5% supported by favourable
commodity price developments. The South African economy, however, was hampered by a 5
month strike in the platinum sector which dragged mining down for the second consecutive period
in 2014.
With regards to macroeconomic convergence progress, most counties are well within the SADC
target of 3-7% in terms of inflation. Most countries have also managed to maintain a budget deficit
within the target of 3% as a ratio of GDP. The majority of the countries, however, are yet to attain
the SADC debt to GDP ratio maximum threshold of 60%.
Figure 1 below shows the growth patterns and projected growth in different regions of the world.
Figure 1: Global Economic Growth (%)
Source: World Economic Outlook


-4
-2

World
Advanced Economies
USA
Emerging Markets and Developing Economies
Sub-Saharan Africa

Commodity Price Developments
Most commodity prices have been firming up since January 2014, on the back of geo-political
tensions in Russia, Ukraine and Iraq (see Table 1 below).
Though firm, the generally subdued international commodity prices continue to suppress export
values for Zimbabwe’s commodities, compounded by production challenges that have severely
limited export volumes.

Table 1: International Commodity Prices 2014

Gold
Platinum
Copper
Nickel
Crude Oil
US$/oz
US$/oz
US$/tonne
US$/tonne
US$/barrel
January

February

March

April

May

June

Source: BBC and KITCO

Precious Metals
Precious metal prices remained firm during the first half of 2014 (see Figure 2 below). Gold prices
increased by 7.64% between January and early March 2014, but receded in late March as the U.S.
long-term interest rates fell and geopolitical risks intensified in Ukraine and Russia. Platinum
prices firmed from US$1 420.43/oz in January to US$1 452.60/oz in June 2014, on the back of
supply side concerns precipitated by labour disputes in South African, the world’s largest platinum
producer.

Figure 2: Gold and Platinum Prices (US$/oz)

Source: BBC, KITCO

Base Metals
Base metal prices were broadly subdued due to concerns over weaker demand from China.
Generally, base metal prices are strongly influenced by economic conditions as they are largely
used as industrial inputs in manufacturing, construction and infrastructure projects. Reflecting this
development, copper prices retreated by 6.8%, from US$7 294.77/tonne in January 2014 to US$6
797.20/tonne in June 2014 (see Figure 3 below).

Nickel prices, however, posted substantial gains following Indonesia’s export ban on unprocessed
ore, as well as the fear of export disruptions in Russia. The prices rose from US$14 096.36/tonne
in January 2014 to US$18 575.83/tonne in June 2014 (see Figure 3 below).

2-Jan-09
16-Feb-09
31-Mar-09
18-May-09
1-Jul-09
13-Aug-09
25-Sep
9-Nov-09
22-Dec-09
5-Feb-10
22-Mar-10
7-May-10
21-Jun-10
3-Aug-10
17-Sep-10
1-Nov-10
14-Dec-10
31-Jan-11
15-Mar-11
3-May-11
16-Jun-11
29-Jul-11
14-Sep-11
27-Oct-11
9-Dec-11
27-Jan-12
12-Mar-12
29-Apr-12
13-Jun-12
26-Jul-12
11-Sep-12
24-Oct-12
6-Dec-12
24-Jan-13
8-Mar-13
24-Apr-13
7-Jun-13
22-Jul-13
5-Sep-13
18-Oct-13
2-Dec-13
Gold
Platinum

Figure 3: Nickel and Copper Prices


2-Jan-09
5-Mar-09
11-May-09
13-Jul-09
11-Sep-09
12-Nov-09
15-Jan-10
18-Mar-10
24-May-10
23-Jul-10
27-Sep-10
26-Nov-10
1-Feb-11
4-Apr-11
10-Jun-11
15-Aug-11
14-Oct-11
15-Dec-11
21-Feb-12
28-Apr-12
29-Jun-12
3-Sep-12
2-Nov-12
9-Jan-13
12-Mar-13
16-May-13
17-Jul-13
19-Sep-13
20-Nov-13
Nickel

10000
12000
2-Jan-09
17-Feb-09
2-Apr-09
21-May-09
7-Jul-09
20-Aug-09
5-Oct-09
18-Nov-09
5-Jan-10
18-Feb-10
7-Apr-10
24-May-10
7-Jul-10
24-Aug-10
7-Oct-10
22-Nov-10
10-Jan-10
23-Feb-11
8-Apr-11
31-May-11
14-Jul-11
31-Aug-11
14-Oct-11
29-Nov-11
18-Jan-12
2-Mar-12
20-Apr-12
7-Jun-12
23-Jul-12
7-Sep-12
23-Oct-12
6-Dec-12
25-Jan-13
12-Mar-13
29-Apr-13
13-Jun-13
29-Jul-13
13-Sep-13
29-Oct-13
12-Dec-13
Copper

Source: BBC, KITCO

Oil Prices
Crude oil prices rose by 4% from US$107.44/barrel in January 2014 to US$11.77/barrel in June
2014, amid geopolitical tensions in Ukraine and numerous supply outages in Libya and Iraq. Oil
prices reached their 6-month high in June 2014, as instability in Iraq intensified.

Figure 4: Crude Oil Prices (US$/barrel)
Source: BBC and KITCO
2. DOMESTIC ECONOMY
The domestic economy continues to face a number of challenges, including persistent liquidity
shortages; declining production and output levels across key sectors of the economy; low foreign
direct investments (FDI) and external lines of credit; widening current account deficit; limited
fiscal space; and energy shortfalls. These challenges are, however, reflective of underlying
structural rigidities and bottlenecks in the economy, such as rapidly deteriorating infrastructure;
external debt overhang; growing informalisation of the economy; perceived country risk and lack
of confidence in the economy.
The aforementioned challenges continue to weigh down efforts geared at reviving the economy,
which is already exhibiting weak and distress signals, particularly in the manufacturing sector. The
challenges may also prevent the domestic economy from benefiting from the positive spin-offs
from the anticipated growth in the world economy in 2014 and in the medium to long term.
The lack of adequate long term financing for retooling and working capital purposes continues to
severely undermine the growth of the economy. This mainly reflects the low levels of FDI, coupled

2-Jan-09
13-Feb-09
27-Mar-09
13-May-09
25-Jun-09
6-Aug-09
17-Sep-09
29-Oct-09
10-Dec-09
25-Jan-10
8-Mar-10
22-Apr-10
3-Jun-10
15-Jul-10
30-Aug-10
11-Oct-10
22-Nov-10
6-Jan-10
17-Feb-11
31-Mar-11
18-May-11
30-Jun-11
15-Aug-11
26-Sep-11
7-Nov-11
19-Dec-11
3-Feb-12
16-Mar-12
3-May-12
15-Jun-12
27-Jul-12
11-Sep-12
23-Oct-12
4-Dec-12
21-Jan-13
4-Mar-13
17-Apr-13
30-May-13
11-Jul-13
26-Aug-13
7-Oct-13
18-Nov-13

with declining external lines of credit. As a result, capacity utilization levels in the manufacturing
sector declined from 45% in 2010 to below 40% in 2013.
In addition, the business operating environment remains difficult, particularly in view of the
negative perceptions around the interpretation and implementation of the indigenization and
economic empowerment regulations. The negative perceptions have also adversely affected the
country’s Ease of Doing Business Index rating. According to the World Bank Ease of Doing
Business Index, Zimbabwe ranked 170 in 2014, from 168 in 2013. The Ease of Doing Business
Index ranks economies from 1 to 185, with first place being the best. A high ranking (a low
numerical rank) means that the regulatory environment is conducive to business operation. The
ranking does not, however, measure all aspects of the business environment though it provides an
overview of the business environment in an economy.
Fiscal performance remains under considerable pressure, exacerbated by the general slowdown in
economic activity and inherent liquidity shortages. Monthly revenues for the period January to
June 2014 fell short of targets, with non-discretionary expenditures increasing. Consequently, a
wider fiscal deficit is now anticipated for 2014.
On the monetary front, broad money growth continued to show signs of weakening, reflecting the
general slowdown in the economy, as well as the difficult balance of payments situation. These
factors have combined to worsen the liquidity crunch, with an adverse impact on economic
activity. Since the last quarter of 2013, there has been a general slowdown in lending by banks due
to liquidity constraints, as well as an increase in non-performing loans.
Against this background, inflation was in negative territory for five months during the first and
second quarters of 2014, as a result of a combination of factors, which include depressed domestic
aggregate demand, tight liquidity conditions, a softer South African rand and higher international
oil and food prices. Deflationary pressures have, however, been dissipating since April 2014.
To arrest the economic slowdown and set the path for recovery, Government has adopted the
Zimbabwe Agenda for Sustainable Social-Economic Transformation (ZIM ASSET), whose
implementation has taken a cluster approach and enables Government to prioritise the
implementation of programmes and projects. The successful implementation of ZIM ASSET,

anchored on exploitation of the country’s abundant human and natural resources, is expected to
result in sustainable development and social equity.

3. REAL SECTOR DEVELOPMENTS

Real GDP
Real economic growth is estimated to have slowed down to 4.5% in 2013, from 10.6% in 2012,
with developments in the first half of 2014 pointing to a further slackening in economic activity to
result in an economic growth of around 3% in 2014. In the outlook period, downside risks remain
high mainly due to low international commodity prices; increasing fiscal pressures against
declining revenues; low foreign direct investment; shortage of liquidity; and low aggregate
demand.
Figure 5: Economic Growth (%)

Source: Zimstat

Real GDP growth in 2013 was largely driven by mining (11.7%); finance and insurance (11.3%);
transport and communication (7%); and distribution, hotels and restaurants (3.9%).

Table 2: Zimbabwe: Gross Domestic Product - Real Growth Rates
(Annual percent change)
Items
Weights

(2009=100)
Actual
Actual
Actual
Est.
Est.
Agriculture, hunting
and fishing

Mining and
quarrying

Manufacturing

Electricity and
water

Construction

Finance and
insurance

Real estate

Distribution, hotels
and restaurants

Transport and
communication

Public
administration

Education

Health

Domestic services

Other services

Less Imputed bank
service charges

GDP at factor
cost

Net other taxes
on production

GDP at basic
prices

Net taxes on
products

Net indirect taxes

GDP at market
prices

Source: Zimstat

Agriculture
Agriculture output is estimated to have registered a negative growth of 2.6% in 2013, on account
of reduced maize, cotton, wheat, sugar cane and dairy output. This followed an unfavourable
agricultural season.
Table 3: Annual Growth (%) in Selected Agriculture Sub Sectors

2013 Est
Tobacco (flue cured)

Maize

Beef

Cotton

Sugar

Horticulture

Poultry

Groundnuts

Wheat

Dairy (m lt)

Coffee

Soybeans

Tea

Paprika

Source: Zimstat

The country, however, experienced a relatively favourable 2013/2014 agriculture season, which is
expected to result in a projected 23.8% increase in agricultural output. The increase in tobacco
output mainly reflected the success of the production and marketing arrangements in the sector,
particularly contract farming.

Mining
The mining industry, which has been the main driver of economic growth since the introduction
of multicurrency system, has shown signs of a slowdown, largely due to depressed, international
mineral prices. The performance of the sector in the first half of 2014 shows that the output of
platinum and palladium were depressed, compared to the corresponding period in 2013.
Contract Farming
The term contract farming involves agricultural production being carried out on the
basis of an arrangement where a farmer and firm, usually agro-processor, engage in
a forward agreement of production and marketing of the produce.

The terms of the contract vary and usually specify how much produce the contractor
will buy and at what price. The contractor often provides credit, inputs and technical
advice. The contractor is guaranteed of supply at a pre-determined price, while the
farmer is assured of a market for his output at a pre-determined return. Contracting
is, therefore, a way of allocating benefits and risks between producer and contractor;
the farmer takes the risk of production while the contractor takes the risk of
marketing.

The basis of contract farming, therefore, is the commitment of the farmer to provide
a specific commodity in quantities and at quality standards as determined by the
purchaser and the commitment of the company to support the farmer’s production
and to purchase the commodity.

Contract farming arrangements thus require a long-term commitment from both
parties to be successful. When efficiently organized and managed, contract farming
reduces risk and uncertainty for both parties as compared to buying and selling crops
on the open market.

Gold production, however, registered a marginal growth, increasing to 3 337kgs during the first
quarter of 2014, from 3 266kgs in the same period in 2013. The designation of Fidelity Printers
and Refiners (FPR) as the sole buyer of gold in the country, coupled with the downward revision
of royalties from 7% to 3% for small gold producers, is likely to reduce smuggling and lead to an
improvement in recorded gold output for 2014. Coal output continues to benefit from increased
production at Makomo Resources. The ramping up of nickel production at Bindura Nickel
Corporation (BNC) is also expected to spur nickel output in 2014 (See Table 4).
Table 4: Mineral Production: First Quarter 2014

Mineral
Dec-13
Jan-14
Feb-14
Mar-14
Cumulative
1st Quarter

Chrome \Kt

Coal \Kt
525 178.0
525 060
513 597
n/a
1 038 657.0
Cobalt \t

Copper \t

Gold \kg

Nickel \t

Paladium \kg

Platinum \kg

Rhodium \kg

Ruthenium \kg

Source: Chamber of Mines of Zimbabwe, 2014

Figure 6: First Quarter Mineral Production (2009 to 2014)
Source: Chamber of Mines of Zimbabwe, 2014

A comparative analysis of the first quarter mineral production over the period 2009 to 2014 shows
that the rate of growth of mineral production is stagnating, suggesting maximum usage of existing
capacity. In this regard, a significant amount of Foreign Direct Investment (FDI) is required to
facilitate the establishment of green field projects and expansion of existing mines.
Manufacturing
The lack of adequate long term financing for retooling and working capital purposes continues to
severely undermine the performance of the industry. This mainly reflects the low international
credit rating attached to Zimbabwe. The country was ranked very low, at 170 out of 189 countries
in 2013, on the World Bank’s Ease of Doing Business Indicators.
The competitiveness of the manufacturing sector is also affected by the high cost of borrowing,
use of antiquated machinery and frequent power outages. As a result, the manufacturing industry
faces stiff competition from cheap imports from South Africa and China.
Capacity utilization levels in the manufacturing industry have also declined on the back of lack of
adequate long term financing for retooling and working capital purposes and low level of FDI.
According to the 2013 Confederation of Zimbabwe Industries Manufacturing Sector Survey,


Q1-2009
Q1-2010
Q1-2011
Q1-2012
Q1-2013
Q1-2014
Gold/kg
Platinum/kg
Palladium/kg
Nickel/t

capacity utilization levels declined progressively from 56% in 2011 to 44.6% in 2012 and 39.6%
in 2013. Figure 7 below shows developments in capacity utilization for the period 2009 to 2013.
Figure 7: Capacity Utilization in the Manufacturing Sector (%)

Source: CZI

Table 5 below shows results of a snap survey on capacity utilization by sub sector, conducted by
the CZI for the first half of 2014 for selected manufacturing sub-sectors.

Table 5: Capacity Utilisation for Selected Manufacturing Sub-Sectors
Sector
% Change in Capacity Utilisation
Battery Manufacturers
-4
Car Assemblers
-2.5
Engineering
-11
Food and Beverages Manufacturers
2.7
Furniture Manufacturers
-3
Industrial Chemicals
-3
Leather and Allied
-1.5
Plastics Manufacturers
-12.5
Tobacco Processors
-2
Textiles and Clothing
-5
Source: CZI, 2014


Reflecting the difficult operating environment, some players in the manufacturing sector have
ceased operations owing to viability challenges. The widespread closure of companies has also
resulted in substantial job losses in the formal sector. According to the Employers’ Confederation
of Zimbabwe (EMCOZ), a total of 4 007 and 2 376 employees were retrenched in 2012 and in
2013, respectively. The table below shows quarterly retrenchment figures since 2013.

Table 6 : Retrenchment Statistics
Quarter
No of Retrenchees
January-March 2013

April-June 2013

July-September 2013

October-December 2013

January-March 2014

Source: Retrenchment board

The country has also witnessed an increasing number of firms being placed under judicial
management in the last 2 years. According to data obtained from the Master of High Court,
companies placed under judicial management rose from 9 in 2010 to 37 in 2013. The table below
shows companies that were either placed under judicial management or liquidated.

Table 7: Companies under Judicial Management & Liquidation
Year

Companies Under Judicial Management

Applications for Winding Down

n/a
Source: Master of High Court, 2014

A significant number of companies are also failing to pay their staff on a regular basis,
accumulating salary arrears and further adversely impacting on aggregate demand.

4. INFLATION DEVELOPMENTS

Annual inflation was in negative territory for the months of February, March, April, May and June
2014, though the deflationary pressures have been dissipating since April 2014. Annual headline
inflation stood at -0.08% in June 2014, gaining 0.11% on the May 2014 rate of -0.19%. Figure 1
below shows the year-on-year inflation profile for the period January 2012 to June 2014.

Figure 8: Annual Inflation Profile (%)

Source: ZIMSTAT, July 2014

The deflationary pressures are attributed to depressed effective domestic demand, tight liquidity
conditions and a weak South African rand. The South African rand has generally depreciated
against the US dollar, fluctuating around ZAR10.50 to the US dollar during the first half of 2014.


-2
-1

Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Zimbabwe
South Africa

Figure 9: Rand/US Dollar Exchange rate

Source: RBZ 2014
Quarterly annualized inflation which had fallen from 0.63% in January 2014 to -0.12% in March
2014, rose to 1.71% in June 2014, pointing to a reversal of deflation in the short term.
Figure 10: Quarterly Annualized Inflation Profile (%)

Source: RBZ July 2014


26-May-13
11-Jun-13
27-Jun-13
13-Jul-13
29-Jul-13
14-Aug-13
30-Aug-13
15-Sep-13
01-Oct-13
17-Oct-13
02-Nov-13
18-Nov-13
04-Dec-13
20-Dec-13
05-Jan-14
21-Jan-14
06-Feb-14
22-Feb-14
10-Mar-14
26-Mar-14
11-Apr-14
27-Apr-14
13-May-14
29-May-14
14-Jun-14
30-Jun-14


Regional Inflation Developments
Zimbabwe’s inflation rate at -0.1% in June 2014 was the lowest in the SADC region. Table 8
below shows Zimbabwe’s annual inflation rate compared to inflation rates obtaining in the region
for June 2014. Most SADC countries have, however, made significant strides in reducing their
inflation rates to within the 2018 SADC convergence inflation target of between 3% and 7%. This
is commendable performance for the region.
Figure 11: Selected SADC Countries’ Inflation Rates (%)
Source: Country Central Bank Websites, 2014


-3

May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
SADC
Convergence
Inflation Target
3-7%
SADC Inflation Rates (%)
Zimbabwe
SA
Botswana
Mozambique
Zambia

Figure 12: Selected SADC Countries’ Inflation Rates (%)
Source: Country Central Bank Websites, 2014
The marginal rise in inflation experienced during the second quarter of the year, if sustained over
a period of time, could result in the economy moving out of deflation. Inflation is, therefore,
expected to be in positive territory for the rest of 2014.

5. PUBLIC FINANCES

Fiscal performance remains considerably under pressure, exacerbated by the general slowdown in
economic activity, inherent liquidity shortages and the growing informalisation of the economy.
Revenues
Cumulative revenues for the first half of 2014 amounted to US$1.72 billion, against a target of
US$1.85 billion. The revenue collections for the half year to June 2014, represents a 6.3% decline
from US$1.83 billion for the same period in 2013. Tax revenue accounted for 97% of the total
revenue and non-tax revenue, 3%.The subdued revenue collections during the first half of 2014
are symptomatic of a shrinking economy. The underperformance of Government revenues was

Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
SADC
Convergence
Inflation Target
3-7%
Tanzania
Malawi

reflected in monthly revenue shortfalls for the period January to June 2014, as shown in Figure II
below.

Figure 13: Monthly Revenue (Actual vs Target)
Source: Ministry of Finance, June 2014

Tax on income and profits and VAT continued to dominate in terms of contribution to total
revenue during the second quarter of 2014, accounting for 49.5% and 24.6%, respectively.

Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
US$ Millions
Actual
Target

Figure 14: Revenue Structure as at 30th June 2014

Source: Ministry of Finance, June 2014


Table 8: Comparison of Revenue Collections for the First Half of 2013 and 2014

Six months to June
2013 (US$ million)
Six months to June
2014 (US$ millions)
Variance
(US$ millions)
Income and Profit Tax
653.9
728.9
75.0
Value Added Tax
508.7
451.4
(57.3)
Customs
182.2
138.6
(43.6)
Excise Duty
242.8
241.4
(1.4)
Non Tax Revenue
165.1
88.9
(76.2)
Total
1752.7
1649.2
(103.5)
Source: Ministry of Finance, June 2014
As shown in Table 9 above, revenue performance of the different sub heads for 2014 were lower
compared to 2013, except for income and profit tax, which benefited from increased revenue
compliance measures being implemented by the Zimbabwe Revenue Authority.
VAT, 24.6%
Income & Profits,
49.5%
Excise, 12.1%
Customs Duty, 7.5%
Non Tax Revenue,
3.2%
Other Indirect Taxes,
3.1%

Expenditures
Total expenditures for the first half of 2014 amounted to US$1.7 billion, against a target of US$1.8
billion, reflecting the constrained fiscal position, emanating from depressed revenue collections.
Employment costs accounted for 62.3% and 58%, of recurrent and total expenditures, respectively,
up from the respective historical averages of 52% and 48%. This followed the upward review of
civil service salaries in February 2014. Capital expenditure constituted 6.8% of the total
expenditures, constraining the implementation of on-going and earmarked infrastructural projects
in the country.

Figure 15: Government Expenditure for the First Half 2014
Source: Ministry of Finance, June 2014


Employment costs,
58%
Capital Expenditure
and Net Lending, 7%
Other current
expenditure, 35%

6. EXTERNAL SECTOR DEVELOPMENTS

The country’s external sector position remained difficult, on account a growing import dependence
against subdued export performance. The continued closure of some companies, declining
industrial capacity utilization, and loss of competitiveness have combined to further widen supply
gaps in the economy, and resulted in increased demand for imports. Moreover, weakening
international commodity prices for the country’s key export minerals, coupled with a slow-down
in domestic economic activity and lack of FDI, affected export viability.

Merchandise Trade Developments
Total exports from January to June 2014, amounted to US$1,228.4 million, against imports of
US$2 996.3 million, resulting in a trade deficit amounting to US$1,767.9 million. While imports
remained relatively stable, averaging about US$500 million per month over the first half of the
year, monthly exports slowed down from US$278.2 million in January 2014, to US$156.4 million
in March, before recovering to US$238 million in June 2014.
Figure 16: External Trade: January-June 2014 (US$ Millions)
Source: ZIMSTAT


Jan
Feb
Mar
Apr
May
Jun
Exports
Imports
Trade Balance

On the back of a huge import bill that continues to surpass export earnings, the current account
deficit widened from 24% of GDP in 2012, to 28% of GDP in 2013.
Capital Account Developments
The capital and financial account of the balance of payments recorded surpluses, on the back of
increased access to debt creating capital flows. In this regard, the capital account surplus increased
from US$1.7 billion in 2012 to US$2.7 billion in 2013. Local banks sourced credit lines on behalf
of firms or on their own books for on-lending domestically.
Foreign direct investment (FDI), however, remained subdued although it improved slightly from
US$350 million in 2012 to US$373 million in 2013. The increase was mainly attributed to
greenfield investments and inter-company loans. Portfolio investment inflows also increased from
US$99 million in 2012, to US$283.3 million in 2013.
Private Sector Offshore Loans
Notwithstanding subdued non-debt creating capital inflows such as FDI and portfolio investment,
utilization of private sector offshore long term loans increased from US$434 million in 2012 to
US$1.3 billion in 2013. Higher utilization levels also reflected the ability of the private sector to
timely meet loan repayment obligations, without accumulating arrears.
Despite increased access to private sector offshore facilities in 2013, loan utilization levels
remained subdued during the period January to April 2014, with only US$7.9 million (1%) of the
approved US$706.3 million having been disbursed as at 30 April 2014. This mainly reflected the
general slowdown in economic activity, as well as failure by companies to meet some conditions
precedent.

Table 9: Loan Disbursements (as at 31 December 2013)
Sector


No. of
Applications

Amount
Approved
(US$M)
Amount
Disbursed
(US$M)
Utilization Rate
(%)

Agriculture

1187.8
441.5
37%
Distribution

375.3
110.0
29%
Energy

294.4
31.0
11%
Financial

811.4
445.6
55%
Manufacturing

154.7
72.8
47%
Mining

262.9
158.2
60%
Transport

11.3
9.6
85%
Tourism & Hospitality

9.4
8.3
89%
Construction/Engineering/
Property Development

9.0
1.5
17%
ICT

32.8
4.8
15%
TOTAL

3148.8
1283.2
41%
Source: RBZ
Overall Balance of Payments
Reflecting developments in the current and capital accounts, the country’s overall balance of
payments recorded a deficit of US$366.4 million in 2013, which is further projected to widen to
US$658.6 billion in 2014.

Figure 17: Current, Capital and Overall Balance (US$ Billions)

Source: RBZ

US$ Millions
Current Account Balance
Capital Account Balance
Overall Balance

Financing of Balance of Payments
The financing of the balance of payments has remained a challenge due to low foreign currency
reserves. Against the background of reserve inadequacy and attendant resource constraints, the
country has been accumulating external payment arrears, which increased from US$5.95 billion
in 2012 to US$6.2 billion in 2013. Adverse balance of payments developments continue to impose
a constraint on the mobilization of bank deposits, and on the attainment of fast-paced economic
growth.
Figure 18: External Payment Arrears (US$ Billion)
Source: RBZ

7. MONETARY DEVELOPMENTS

On an annual basis, the broad money supply growth rate, which had slowed down to 0.55% in the
last quarter of 2013, rebounded in 2014 to 4.11% and 5.61% in the first and the second quarters
of 2014, respectively. The annual growth in broad money during the second quarter of 2014 was
on the back of expansions in demand deposits, US$173.8 million; over 30-days deposits;
US$161.4 million; savings deposits, US$77.1 million; and under 30-days deposits, US$73.1
million.

1.5

4.5

7.5

Arrears

On a year to date basis, broad money grew by 9.95%, compared to a decline of 1.25% recorded
during the same period in 2013. The growth was partly driven by tobacco related inflows for this
year’s selling season. As at end of June 2014, cumulative tobacco sales amounted to US$647.4
million, compared to US$565.7 million sold the same period in the previous year.
The general and sustained slowdown in annual broad money growth, from a high growth rate of
372.95% recorded in January 2010 to 12.65% by June 2014, reflected the difficult balance of
payments position, low FDI and other investment inflows. This partly underpins the liquidity
challenges that have persisted in the economy, since the adoption of the multiple currency system
in 2009.
Figure 19: Annual Broad Money Growth Rate and Level

Source: RBZ

Domestic Credit
In tandem with the declining growth in broad money supply, credit to the private sector, the main
driver of domestic credit, declined by 1.74%, from US$3 666.2 million in June 2013 to US$3
602.3 million in June 2014. The decline reflected the slowdown in lending by banks due to
liquidity constraints, as well as an increase in non-performing loans. The overall ratio of nonperforming loans to total credit in the banking sector increased to 18.49% in June 2014, from
14.51% recorded in June 2013.


Annual Growth
US$ million
Demand
Savings
Under-30 day
Over-30 day
Growth

Figure 20: Structure and Level of Domestic Credit

Source: RBZ

Interest Rates
In the absence of an anchor rate, interest rates quoted by banks continued to vary across banks and
were largely determined by individual banks’ liquidity positions. As at end of June 2014, lending
rates ranged between 6% and 35%, with most banks quoting rates around 20% per annum. The
level of interest rates quoted by banks, in large part, reflected individual banks’ liquidity positions
and their cost of funds. Banks with low cost of funds and better access to funding quoted lower
rates, compared to the other banks.


-500


Dec 09
Dec 10
Dec 11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
US$ million
PEs
Gvt
Pvt Sector

Non-Performing Loans

In general terms, non-performing loans refer to those financial assets from which banks
no longer receive interest and/or installment payments as scheduled. They are known as
non-performing because the loan ceases to generate income for the bank. In terms of
section 18 of Part IV of the Third Schedule of Banking Regulations, 2000, “nonperforming”, in relation to any asset, means that:
a. the asset is not generating any income; or
b. the principal, interest or both is due and unpaid for 90 days or more; or
c. interest payment equal to 90 days or more have been capitalized, refinanced or
rolled over.

The unfavourable macroeconomic environment, largely liquidity crunch, coupled with
poor corporate governance at some banks, resulted in Zimbabwe’s financial institutions
recording high defaults on loans. In addition, poor corporate governance practices and
weak risk management systems at some institutions, has contributed to the increases in
NPLs. The average ratio of NPLs increased to 18.49%as at June 2014, up from below
5% in 2009.

Figure 21: Evolution of Non-Performing Loans

Source: RBZ

NPLs have adverse effects on banks’ finances as they reduce asset quality as well as profitability.
The rise in NPLs also leads to higher risk aversion by banks, which may result in lower lending to
economic agents thus further starving the economy of the much needed funding. The challenge of
NPLs can be partly addressed by the introduction of a credit reference bureau.

Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
%

Credit Reference Bureaux
Credit Reference Bureaux support the central role played by banks and other financial institutions in
extending financial services within an economy. According to Wikipedia.org, “A credit bureau is
organization providing information on individuals' borrowing and paying habits. Credit information such
as a person’s previous loan performance is a powerful tool to predict his future behavior. Such credit
information institutions reduce the effect of asymmetric information between borrowers and lenders, and
alleviate problems of adverse selection and moral hazard. Thus, credit bureaus help lenders make faster and
more accurate credit decisions”.
The Reserve Bank of Zimbabwe is currently finalizing a framework for the operationalization of Credit
Reference Bureaus (CRBs) which is expected to assist in reducing the current asymmetric information gap
between borrowers and lenders, in the process, improving credit risk management at banks.
The setting up of CRBs is expected to enhance prudent credit risk management practices by banking
institutions. This will in turn curtail the high levels of over-borrowings and over-indebtedness by a number
of corporates which is expected to reduce the high levels of non – performing loans in the economy.
Rwanda
After experiencing high levels of non-performing loans in the banking sector, the National Bank of Rwanda
(BNR) spear headed the formation of a credit reference bureau, CRB Africa, in 2010. All financial
institutions signed agreements to provide CRB Africa with relevant credit information of their clients.
Resultantly, non-performing loans fell by 10% over the year December 2011 to December 2012.
Mauritius
The Mauritius Credit Information Bureau (MCIB) was set up under the Bank of Mauritius Act 2004 and
came into operation on 1 December 2005. MCIB is fully owned and operated by the Bank of Mauritius
from within its premises. Prior to the establishment of the MCIB the average NPLs ratio was around 18%.
When the MCIB was introduced in 2005 the ratio came down gradually to the current levels of 2%. NPLs
are no longer a problem in Mauritius.

Figure 22: Growth in Credit to the Private Sector

Source: RBZ

The slowdown in credit to the private sector, coupled with limited access to external sources of
financing, is mirrored in declining economic performance. In addition, high finance costs have
hampered the operations of the domestic industry as it rendered them less competitive on both the
domestic and international markets. Furthermore, after losing business, companies have not been
able to service their loans, thus worsening the size of non-performing loans on banks’ balance
sheets.

Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14

8. PAYMENT, CLEARING AND SETTLEMENT ACTIVITIES

The value of transactions processed through the National Payment System in the quarter ending
30 June 2014, was almost the same at US$12.8 billion, as the US$12.9 billion during the same
period in 2013. In volume terms, there was a 39% increase in transactions from 35 million to 49
million. Most payment streams recorded increases in transactions processed both in value and
volume terms for the period under review, compared to the quarter ending 31 March 2014. Mobile
values and cheque volumes, however, registered decreases of 15% and 5%, respectively. Statistical
information on various payment streams for the second quarter of 2014 and previous quarters is
shown in the Table 10 below.
Credit to the Private Sector
The financial sector plays an intermediary role, that is, it mobilizes resources from surplus
units of the economy to deficit units. In addition, the financial sector can be viewed as a
clearing house for all financial flows, thus providing a unique insight into the behavior of
these flows, which sometimes mirrors the flows of real resources among the sectors.
Over the period June 2013 to June 2014, annual growth in credit to the private sector has
been on a downward trend a reflection of a slowdown in lending by banks. The slowdown
is chiefly attributable to liquidity challenges and high credit risk which is mirrored by a rise
in non-performing loans.

Table 10: Transactional activities
PAYMENT
STREAM
SECOND
QUARTER 2013
PREVIOUS
QUARTER
ENDING 31
MARCH 2014
SECOND
QUARTER 2014
CHANGE FROM
LAST QUARTER
PROPORTION

VALUES IN USD

RTGS

CHEQUE

POS

ATMS

MOBILE

INTERNET

TOTAL
12,916,301,263.22
11,522,151,430.45
12,813,917,737.60

100%

VOLUMES

RTGS

CHEQUE

POS

ATMs

MOBILE

INTERNET

TOTAL
35,063,068
41,123,191
48,836,875

100%
Source: RBZ
The value of transactions processed through the RTGS system for the quarter ending 30 June 2014
stood at US$10.5 billion, down from US$11 billion recorded during the same period in 2013. Total
transactions in volume terms registered a decrease of 1% from 583 866 to 577354. As shown in
the Figure 17 below, RTGS transactions were higher in both value and volume terms in the second
quarter, compared to the first quarter in 2014.

Figure 23: Volumes and Values of RTGS Transactions.
Source: RBZ

SWIFT Foreign Currency Transactions
SWIFT foreign currency payments declined by 0.3% to US$1.673 billion during the quarter ending
June 2014, from US$1.678 billion in the quarter ending March 2014. SWIFT foreign currency
receipts totaled US$1.796 billion in the quarter ending June 2014, up from US$1.705 billion in the
quarter ending March 2014.


Quarter
ending June

Quarter
ending
September

Quarter
ending
December

Quarter
ending March

Quarter
ending June

RTGS Values in US$ Billions
RTGS Volumes in Thousands
Volumes
Values

Figure 24: SWIFT Quarterly Foreign Currency Transactions


Retail Payments
Figures 19 and 20 below show the trend in the values and volumes of retail transactions for the
second quarter ending June 2013 to second quarter of 2014.

Volumes in Thousands
Value in US$Billions
Foreign Currency Inflow Values
Foreign Currency Outflow Values
Foreign Currency Outflow Volumes
Foreign Currency Inflow Volumes

Figure 25: Volumes of Retail Transactions

Source: RBZ
Figure 26: Values of Retail Transactions

Source: RBZ
Access Points and Devices
The table below shows the access points and devices from the quarter ending June 2013 to June
2014.

Table 11: Payment Systems Access Points

Quarter
ending June

Quarter
ending
September

Quarter
ending
December

Quarter
ending March

Quarter
ending June

Mobile Banking
Agents

ATMs

POS

PAYMENT SYSTEMS ACCESS DEVICES
Debit Cards

Credit Cards

Prepaid Cards

Mobile Banking
Subscribers

Internet Banking
Subscribers

Source: RBZ
Access points continued to exhibit growth, with the number of Mobile banking agents and Point
of Sale (POS) devices being gradually deployed in remote parts of the country. This initiative was
a result of continued guidance to financial institutions by the Central Bank, to promote electronic
means of payments that promote financial inclusion.

Figure 27: Number of Access Points

Source: RBZ

There were marginal increases in the number of subscribers to both mobile and internet banking,
from the first quarter ending March 2014, to the second quarter ending June 2014 as shown in the
Figure 28 below.

Quarter ending June

Quarter ending
September 2013
Quarter ending
December 2013
Quarter ending March

Quarter ending June

Thousands
POS POPULATION
ATM Population
Mobile Banking Agents

Figure 28: Number of Access Devices

Source: RBZ

9. STOCK MARKET DEVELOPMENTS

The losses registered on the Zimbabwe Stock Exchange during the first quarter were reversed in
the quarter ending June 2014. The industrial index increased by 5.8%, from 176.32 points in March
2014 to 186.57 points in June 2014, largely on the back of news that the Government would be
reviewing the indigenization and economic empowerment policy. The mining index also firmed
to 61.32 points in June 2014, from 29.51 points in March 2014, representing a 107.8% increase.
This followed increases in production at Hwange Colliery Company and Bindura Nickel Mine.


Quarter ending
June 2013
Quarter ending
September

Quarter ending
December 2013
Quarter ending
March 2014
Quarter ending
June 2014
Actine Mobile & Dr Card Users in Millions
Internet, Cr & Prepaid Cards in Thousands
Mobile
Dr Cards
Internet
Cr Cards
Prepaid Cards

Figure 29: Zimbabwe Stock Exchange Indices


Source: Zimbabwe Stock Exchange, 2014

Market Turnover
In line with the performance recovery in the second quarter of 2014, there was improvement in
trading activity on the stock market. Market turnover volume increased by 22.9% to 837 523 059
shares in the quarter up to June 2014, from 681 599 364 shares in the previous quarter. In addition,
market turnover value also increased by 3% from $112.5 million in the first quarter to US$115.9
million in the quarter under review. Despite a decline in foreign purchases in the second quarter
of 2014, foreign investor participation in the bourse remained strong, contributing about 60% of
trade value, against a background of Government’s intention to review the Indigenization Policy.
During the quarter under review, net foreign purchases were US$3.1 million, compared to US$29.5
million the previous quarter.

RESERVE BANK OF ZIMBABWE

20-Feb-09
21-Apr-09
20-Jun-09
19-Aug-09
18-Oct-09
17-Dec-09
15-Feb-10
16-Apr-10
15-Jun-10
14-Aug-10
13-Oct-10
12-Dec-10
10-Feb-11
11-Apr-11
10-Jun-11
9-Aug-11
8-Oct-11
7-Dec-11
5-Feb-12
5-Apr-12
4-Jun-12
3-Aug-12
2-Oct-12
1-Dec-12
30-Jan-13
31-Mar-13
30-May-13
29-Jul-13
27-Sep-13
26-Nov-13
25-Jan-14
26-Mar-14
25-May-14
Industrial Index
Mining Index

STATISTICAL TABLES

1.
Liabilities and Assets of the Central Bank
1.1. Reserve Bank: Liabilities


S1
1.2. Reserve Bank: Assets


S2

2.
Liabilities and Assets of Other Depository Corporations
2.1. Commercial Banks: Liabilities


S3
2.2. Commercial Banks: Assets


S4
2.3. Accepting Houses: Liabilities


S5
2.4. Accepting Houses: Assets


S6
2.5. Building Societies: Liabilities


S7
2.6. Building Societies: Assets


S8

3.
Money Supply and Bank Liquidity
3.1. Monetary Aggregates


S9
3.2. Broad Money Survey


S10
3.3. Analysis of Monthly Changes in Money Supply


S11
3.4. Analysis of Yearly Changes in Money Supply


S12
3.5. Sectoral Analysis of Commercial Banks’ Loans and Advances


S13
3.6. Sectoral Analysis of Merchant Banks’ Loans and Advances


S14
3.7. Sectoral Analysis of Commercial Banks’ Deposits


S15

4.
National Payment Systems


4.1. Values of Transactions


S16
4.2. Volumes of Transactions


S16

5.
Interest Rates, Security Yields and Prices
5.1. Lending Rates


S17
5.2. Deposit Rates


S17
5.3. Stock Exchange Indices


S18
5.4. Monthly Inflation


S19
5.5. Quarterly Inflation


S20
5.6. Annual Inflation


S21

6.
Balance of Payments
6.1. Monthly Cross Border Payments


S22

6.2. Monthly Cross Border Receipts


S23
6.3. External Debt Outstanding by Debtor


S24
6.4. External Debt Outstanding by Source


S25
6.5. External Debt Service and Debt Service Ratios


S26

7.
National Accounts
7.1. Real Gross Domestic and National Product per Capita at Market Prices

S27
7.2. Gross Domestic Product at Factor Cost by Industry


S28
7.3. Expenditure on Gross Domestic Product


S28
7.4. Mineral Production


S29
7.5. Electricity Energy Produced and Distributed


S30
7.6. Volume of Manufacturing Index


S31
TABLE 1.1: RESERVE BANK - LIABILITIES
US$ '000s
Liabilities to the public
Notes and
Deposits
Capital
coin in
and
circulation
Foreign
general
End of
Bankers/1
Central
Other
Total
loans
Other
Total
reserve
Other
Foreign Liabilities
TOTAL
Govt.


2013:Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

2014:Jan

Feb

Mar

Apr

May

Jun

1. Commercial banks and accepting houses.
2. Statutory bodies.


S4


TABLE 1.2: RESERVE BANK - ASSETS
US$ '000s
Loans and advances
End of
Gold
Other
Total
Treasury
Other
Central
Other
Govt.
Other
Other
TOTAL
Government
Stock


2013:Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

2014:Jan

Feb

Mar

Apr

May

Jun

Investments
Foreign Assets
Bills Discounted


S5


Loans &
Contingent
Other
Non
Financial
Total
Notes
Total
Other
Balances
Advances
Assets
Assets
Assets
Assets
&
Balances
Balances
Balances
Liquid
with RBZ
Coin
with
with Other
at
Trade
Treasury
Agric PEs
Assets
at Banks
RBZ
Banks
Foreign
Banks
Bills
Bills


2013:Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

2014:Jan

Feb

Mar

Apr

May

Jun

TABLE 2.1: COMMERCIAL BANKS - ASSETS
US$ Millions
Liquid Assets
Securities


S6


Deposits
Capital
and
Of which
End of
Demand
Savings and
Short-term
Long-term
Total
Foreign
Liabilities
RBZ
Other Banks
Reserves
Contingent
Other
Total
Liabilities to
the
Deposits
Liabilities
Liabilities
Liabilities
Public


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

TABLE 2.2: COMMERCIAL BANKS - LIABILITIES
US$ Millions
Amounts Owing to


S7


End of
Notes
&
Balances
Balances
Balances
Total
Coin
with
with Other
at
Trade
Treasury
Liquid
Other
Balances
Loans &
Contingent
Other
Non
Financial
Total
at Banks
RBZ
Banks
Foreign
Banks
Bills
Bills
Assets
with RBZ
Advances
Assets
Assets
Assets
Assets


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

TABLE 2.3 : ACCEPTING HOUSES - ASSETS
US$ Millions
Liquid Assets


S8


Deposits
Capital
Of which
Total
and
Contingent
Other
Total
Liabilities
to the
End of
Demand
Savings and
Short-term
Long-term
Deposits
Foreign
Liabilities
RBZ
Other
Banks
Reserves
Liabilities
Liabilities
Liabilities
Public


Jan
106.9
91.7
21.3


Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

TABLE 2.4: ACCEPTING HOUSES - LIABILITIES
US$ Millions
Amounts Owing to


S9


Liquid
Assets
Notes
Balances
Trade
Treasury
Total
Mortgage
Other
Other
Non
Financial
Total
End of
&
with Other
Bills
Bills
Liquid
Advances
Advances
Assets
Assets
Assets
Coin
Banks
Assets
at Banks

6.7
11.1


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

TABLE 2.5: BUILDING SOCIETIES- ASSETS
US$ Millions


S10


Capital
O f which
Total
and
O ther
Total
Liabilities
to the
End of
Savings
and Shortterm
Long-term
Deposits
Reserves
Liabilities
Liabilities
Public


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

TABLE 2.6 : BUILDING SOCIETIES - LIABILITIES
US$ Millions
Deposits


S11


RBZ
Demand
Deposits
Comm.
Banks Dem.
Deposits
Merchant
Banks Dem.
Deposits
M1
Comm.
Banks
Savings
Deposits
Building Soc.
Savings
Deposits
P O S B
Savings
Deposits
Comm. Banks U30 Day
Deposits
Merchant
Banks U-30
Day Deposits
Building Soc.
U- 30 Day
Deposits
M2
Comm. Banks
O-30 Day
Deposits
Merchant
Banks O-30
Day
Deposits
Building
Soc. O- 30
Day
Deposits
Building Soc.
Class C
Deposits
Building
Soc. Other
Share
Deposits
P O S B
Time
Deposits
M3


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

TABLE 3.1: MONETARY AGGREGATES
US$ '000s


S12


Period
NET FOREIGN
ASSETS
Total Foreign
Assets
Liabilities
RBZ
DMBs
OBIs
NET
DOMESTIC
ASSETS
DOMESTIC
CREDIT
Claims on
Government
(net)
RBZ
DMBs
OBIs
Claims on Public
Enterprises
Claims on
Private Sector
OTHER ITEMS
(NET)
BROAD
MONEY (M3)


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

TABLE 3.2: BROAD MONEY SURVEY
US$ '000s


S13


TABLE 3.3: ANALYSIS OF MONTHLY CHANGES IN MONEY SUPPLY
US$ '000s
NET
FOREIGN
ASSETS
Total
Foreign
Assets
Liabilities
NET
DOMESTIC
ASSETS
DOMESTIC
CREDIT
Claims on
Government
(net)
RBZ
DMBs
OBIs
Claims on
Public
Enterprises
Claims on
Private
Sector
RBZ
DMBs
OBIs
OTHER
ITEMS
(NET)
BROAD
MONEY
(M3)
Broad
Money
(M3)

Domestic
Credit

Claims
on
Private
Sector


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun


S14


NET
FOREIGN
ASSETS
Total
Foreign
Assets
Liabilities \2 RBZ

DMBs

OBIs
NET
DOMESTIC
ASSETS \3
DOMESTIC
CREDIT
Claims on
Government
(net)
RBZ
DMBs

OBIs
Claims on
Public
Enterprises
Claims on
Private
Sector

RBZ

DMBs


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

TABLE 3.4: ANALYSIS OF YEARLY CHANGES IN MONEY SUPPLY
US$ '000s


S15


AGRICULTURE
CONSTRUCTION
COMMUNICATION
DISTRIBUTION
FINANCIAL &
FINANCIAL
MANUFACTU
RING
MINING
SERVICES
TRANSPORT
INDIVIDUALS
CONGLOMERATE
TOTAL
END OF


INVESTMENTS
ORGANISAT
IONS


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

US$ '000s
3.5. SECTORAL ANALYSIS OF COMMERCIAL BANKS’ LOANS AND ADVANCES


S16


AGRICULTURE
CONSTRUCTION
DISTRIBUTION
FINANCIAL
FINANCIAL
MANUFACTURING
MINING
SERVICES
TRANSPORT
INDIVIDUALS
CONGLOMERATE
TOTAL
END OF

INVESTMENT
ORGANISATIONS


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

US$ '000s
TABLE 3.6: SECTORAL ANALYSIS OF MERCHANT BANKS' LOANS AND ADVANCES


S17


AGRICULTURE
CONSTRUCTION
COMMUNICATION
DISTRIBUTION
FINANCIAL
FINANCIAL
MANUFACTURING
MINING
SERVICES
TRANSPORT
INDIVIDUALS
CONGLOMERATES
TOTAL
END OF

INVESTMENT
ORGANISATIONS


2013:Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

2014:Jan

Feb

Mar

Apr

May

Jun

TABLE 3.7: SECTORALl ANALYSIS OF COMMERCIAL BANKS' DEPOSITS
US$ Thousands


S18


MONTH
ZETSS
CHEQUE
POS
ATM
MOBILE
INTERNET
MONTH
ZETSS
CHEQUE
POS
ATM
MOBILE
INTERNET

Jan

Jan

Feb

Feb

Mar

Mar

Apr

Apr

May

May

Jun

Jun

Jul

Jul

Aug

Aug

Sep

Sep

Oct

Oct

Nov

Nov

Dec

Dec

Annual
Total

Annual
Total


Jan

Jan

Feb

Feb

Mar

Mar

Apr

Apr

May

May

Jun

Jun

TABLE 4.1 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY
Values of Transactions (US$ in millions)
TABLE 4.2 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY
Volumes of Transactions (in thousands)


S19


COMMERCIAL BANKS
ACCEPTING HOUSES
END OF
SAVINGS
3 MONTHS
3 MONTHS
End Period
Nominal
Lending
Rates 2
Individuals
Corporate
Nominal
Lending
Rates 2
Individuals
Corporate

Jan

Jan
0.15-8.00
4.00-20.00
6.00-17.00
Feb

Feb
0.15-8.00
4.00-20.00
6.00-17.00
Mar

Mar
0.15-8.00
4.00-20.00
8.00-12.00
Apr

Apr
0.15-8.00
4.00-20.00
8.00-12.00
May

May
0.15-8.00
4.00-20.00
6.00-17.00
Jun

Jun
0.15-8.00
4.00-20.00
6.00-17.00
Jul

Jul
0.15-8.00
3.00-20.00
6.00-17.00
Aug

Aug
0.15-8.00
3.00-20.00
6.00-17.00
Sep

Sep
0.15-8.00
3.00-20.00
11.00-12.00
Oct

Oct
0.15--8.00
3.00-20.00
11.00-12.00
Nov

Nov
0.15--8.00
3.00-20.00
11.00-12.00
Dec

Dec
0.15--8.00
3.00-20.00
11.00-12.00

Jan

Jan
0.15--8.00
3.00-20.00
11.00-12.00
Feb

Feb
0.15--8.00
3.00-20.00
11.00-12.00
Mar

Mar
0.15--8.00
3.00-20.00
11.00-12.00
Apr

Apr
0.15--8.00
3.00-20.00
11.00-12.00
May

May
0.15-8.00
3.00-20.00
11.00-12.00
Jun

Jun
0.15-8.00
3.00-20.00
11.00-12.00
Notes
TABLE 5.2 : BANKS DEPOSIT RATES (percent per annum)1
1. The range of rates qouted by banks during the period.
2. Three (3) months deposit rates revised to exclude rates on inactive or dormant
accounts.
TABLE 5.1: LENDING RATES (percent per annum)1
3. Lending rates exclude rates on staff loans.
1. Table revised, to separate weighted lending rates for individuals and corporate bodies.
2. Nominal Lending Rates depict the range of rates quoted by banks.
Weighted Average
Lending Rates 3
Weighted Average
Lending Rates 3
Merchant Banks
Commercial Banks


S20


US$ Millions
Industrial
Mining
Market Capitalisation

Jan
179.3
84.1
4,700.3
Feb
182.3
72.0
4,748.2
Mar
183.9
66.2
4,726.3
Apr
189.7
72.0
4,894.7
May
212.7
74.0
5,471.2
Jun
211.2
73.3
5,436.6
Jul
232.9
66.8
59,136.8
Aug
181.7
48.7
4,682.3
Sep
200.1
49.9
5,157.2
Oct
209.7
52.7
5,407.4
Nov
213.0
47.0
5,482.0
Dec
202.1
45.8
5,203.1

Jan
189.3
35.4
4,882.1
Feb
189.5
39.2
4,906.9
Mar
176.3
29.5
4,560.3
Apr
172.9
29.6
4,473.5
May
174.9
35.5
4,485.1
Jun
186.6
61.3
4,873.4
TABLE 5.3: ZIMBABWE STOCK MARKET STATISTICS
Source: Zimbabwe Stock Exchange (ZSE)
Indices


S21


FOOD
INFLATION
ALL
ALCOHOLIC
BEVERAGES
CLOTHING
HSING,
WATER,
FURNITURE
HEALTH
TRANSPORT
COMMUNICATION
RECREATION &
EDUCATION
RESTAURANTS
&
MISC.
TOTAL
NON
FOOD &
ITEMS
& TOBACCO
FOOTWEAR
ELECTRICTY,
GAS
AND
CULTURE
HOTELS
GOODS &
FOOD
NON
ALCOHOLIC
BEVERAGES
& OTHER
EQUIPMENT
SERVICES
FUELS
WEIGHTS


2013:Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

2014:Jan

Feb

Mar

Apr

May

Jun

NON-FOOD INFLATION
TABLE 5.4 : MONTHLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \1
( DECEMBER 2012 = 100)


S22


FOOD
INFLATION
ALL
ALCOHOLIC
BEVERAGES
CLOTHING
HSING, WATER,
FURNITURE
HEALTH
TRANSPORT
COMMUNICATION
RECREATION &
EDUCATION
RESTAURANTS &
MISC.
TOTAL NON
FOOD &
ITEMS
& TOBACCO
FOOTWEAR
ELECTRICTY, GAS
AND
CULTURE
HOTELS
GOODS &
FOOD
NON
ALCOHOLIC
BEVERAGES
& OTHER
EQUIPMENT
SERVICES
FUELS
WEIGHTS


2013:Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

2014:Jan

Feb

Mar

Apr

May

Jun

TABLE 5.5 : QUARTERLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \1
( DECEMBER 2012 = 100)
NON-FOOD INFLATION


S23


FOOD
INFLATION
ALL
ALCOHOLIC
BEVERAGES
CLOTHING
HSING,
WATER,
FURNITURE HEALTH
TRANSPORT COMMUNICATION RECREATION &
EDUCATION
RESTAURANTS
&
MISC.
TOTAL
NON
FOOD &
ITEMS
& TOBACCO
FOOTWEAR
ELECTRICTY,
GAS
AND
CULTURE
HOTELS
GOODS &
FOOD
NON
ALCOHOLIC
BEVERAGES
& OTHER
EQUIPMENT
SERVICES
FUELS
WEIGHTS


2013:Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

2014:Jan

Feb

Mar

Apr

May

Jun

TABLE 5.6 : ANNUAL INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \1
( DECEMBER 2012 = 100)
NON-FOOD INFLATION


S24


Jan-13
Feb-13 Mar-13
Apr-13 May-13 Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13 Dec-13
Jan-14
Feb-14 Mar-14
Apr-14 May-14 Jun-14
Merchandise Imports (excl. energy)

- Consumption Goods

- Capital Goods

- Intermediate Goods

Energy (Fuel & Electricity)

Service Payments

- Technical, Professional & consult

- Software

- Other (tourism, edu, freight etc)

Income Payments (Profits, Dividends)

Capital Remittances (outward)

- External Loan Repayments

- Foreign Investment

Other Payments

TOTAL

Table 6.1: MONTHLY CROSS BORDER PAYMENTS
(US$ Millions)


S25


(US$ Millions)
Agriculture
Horticulture
Manufacturing
Mining
Tobacco
Tourism
Transport &
Telecom
Other Services
Total

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec


Jan

Feb

Mar

Table 6.2: MONTHLY CROSS BORDER RECEIPTS


S26


TABLE 6.3: ZIMBABWE: EXTERNAL DEBT OUTSTANDING BY DEBTOR
(US$ millions)
End Period

Long-Term External Debt


6,096
6,607
7,370
Government


4,638
4,929
5,012
Bilateral Creditors


2,597
2,694
2,928
Multilateral Creditors


2,041
2,235
2,084
Private Creditors

Public Enterprises

1,092
1,198
1,356
Bilateral Creditors

Multilateral Creditors

Private Creditors

Monetary Authorities

Multilateral Creditors - IMF

Private

1,002
Short-Term External Debt

1,286

1,564
Supplier's Credits

Reserve Bank

Private

Total External Debt

SOURCE: Ministry of Finance and Reserve Bank of Zimbabwe


S27


End Period

(US$ millions)
Total Medium to Long-Term External Debt

Public and Publicly Guaranteed Debt

Bilateral Creditors

Multilateral Creditors

Private Creditors

Private Non-Guaranteed Long term

1,002
Short-Term External Debt

1,286

1,564
Public and Publicly Guaranteed Debt

Reserve Bank

Private

Total External Debt

Gross Domestic Product


10,956
12,472
12,973
External Debt / GDP

SOURCE: Ministry of Finance and Reserve Bank of Zimbabwe
TABLE 6.4: External Debt Outstanding by Source
(US$ millions)


S28


TABLE 6.5 EXTERNAL DEBT SERVICE AND DEBT SERVICE RATIOS
(US$ MILLIONS)

Government

Capital

Interest

Parastatals

Capital

Interest

Private

Capital

Interest

Total

Capital

Interest

Exports of Goods
and Services

Debt Service ratio

Capital Service Ratio

Interest Service ratio

Note: Figures reflect scheduled debt service.

SOURCE: Ministry of Finance and Reserve Bank of Zimbabwe


S29


Gross
Net Investment
Gross
Gross
Gross
Domestic
Income Paid
National
Domestic
National
Gross
Gross
Product
to other
Product
Product
Product
Domestic
National
Period
Countries
Product
Product


Per Capita
Constant Prices
Current Prices
Constant Prices
TABLE 7.1: REAL GROSS DOMESTIC AND NATIONAL PRODUCT PER CAPITA AT MARKET PRICES
US$ Millions
(at market prices)


S30


Agriculture
Mining
Manufacturing
Electricity
Finance
Distribution
Transport
Public
Hunting and
and
and
Construction
and
Real
Hotels and
and CommAdministration
Other
Period
Fishing
Quarrying
Water
Insurance
Estate
Restaurants
unication
Education
Health
Services
Total


1 . Source : Central Statistical Office .
2 . Includes domestic services and allowance for imputed banking service charges .
TABLE 7.2 : GROSS DOMESTIC PRODUCT AT FACTOR COST BY INDUSTRY
US$ millions
(at current prices )
TABLE 7.3: EXPENDITURE ON GROSS DOMESTIC PRODUCT/1
US$ Millions
(at current prices)
Net
Private
Gross
Net
Expenditure
Private
Gvt
Non-profit
Fixed
Increase
Total
Export of
on Gross
Consumption
Current
Making
Captital
in
Statistical
Domestic
Goods and
Domestic
Period
Expenditure
Bodies
Formation
Stocks
Discrepancy
Expenditure
Services
Product


1 . Source: Zimstat


S31


Period
Gold
Platinum
Palladium
Nickel
Copper
Coal
Chrome
Rhodium
Other/1
Total


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec


Jan

Feb

Mar

Source: Zimstat
1. Other minerals include Ferrosilicon, Iron ore, Iron pyrites and magnesite
Table 7.4: MINERAL PRODUCTION
US$ Millions


S32


By Hwange
Power station
By Kariba
Power
Station
By Other
Power
Station
IPPs
Total from
Zimbabwe
Drawings from
Interconnected
system
From Other non
inter-connected
system
Net imports
Total


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec


Jan

Feb

Mar

Source: Zimstat
Table 7.5: ELECTRICITY ENERGY PRODUCED AND DISTRIBUTED
Interconnected System
Energy Distributed in Zimbabwe
Generation Sent Out
From other sources


S33


Food-Stuffs
(including
stockfeeds)
Drink and
Tobacco
Textiles
Including
Ginning
Clothing and
Footwear
Wood and
Furniture
Paper, Printing
and Publishing
Chemical and
Petroleum
Products
Non-metalic
Mineral Products
Metals and
Metal Products
Transport and
Transport
Equipment
Other
Manufacturing
Groups
All Manufacturing
Groups
Weight

Mean


Mean


Mean


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

TABLE 7.6: VOLUME OF MANUFACTURING INDEX (VMI)
(1990=100)


S34