MONTHLY ECONOMIC REVIEW
MAY 2014
Selected Economic Indicators

Stock Market Developments

Inflation

National Payments System

Statistical Tables

Monetary Developments

INSIDE THIS ISSUE

PAGE
SELECTED ECONOMIC INDICATORS

April

May
Month on
Month
Change
Z.S.E. Mining Index1
29.64
35.45
19.60%
Z.S.E. Industrial Index1
172.91
174.89
1.15%
Money Supply (Total Bank Deposits) (US$)2
4.23 billion
4.33 billion
2.25%
Money Supply (M3) Annual Growth2
6.65%
7.66%
2.25%
Yearly Inflation3
-0.26%
-0.19%
-0.13%
Nominal Commercial Lending Rate (%)
6.00-35.00
6.00-35.00

Sources:
1 Zimbabwe Stock Exchange
2 Reserve Bank of Zimbabwe
3 ZIMSTAT


STOCK MARKET DEVELOPMENTS

In May 2014, the Zimbabwe Stock Exchange
reversed some of the losses registered during
first four months of the year, in line with recovery in other global stock markets.

Marginal improvements in United States
housing and manufacturing production propelled global stock markets in May 2014.
There was, however, mixed performance by
the major African stock markets, with Nigeria and South Africa registering gains whilst
Egypt and Kenya registered losses.

Mixed performance in Africa’s bourses,
however, occurred despite its improved ranking as the second most attractive investment
destination by Ernest and Young’s 2014 Africa Attractiveness Survey.

The Zimbabwe Stock Exchange (ZSE), was
among the African stock markets that registered gains during the month under review.
The industrial index increased by 1.15% to
close at 174.89 points during the period under review. The recovery was largely underpinned by concentrated trading in heavily
capitalized counters. Notwithstanding this
recovery, the industrial index lost 13.42% on
a year to date basis.

Similarly, the mining index gained 19.60%,
to close at 35.45 points in May 2014, from
29.64 points in April. The rebound was
largely driven by renewed investor interest
in Bindura Nickel Mine as a result of strong

2 3

2 4
cash flows which will underpin financing of
future developments. On a year to date basis, however, the mining index lost 22.58%.

The volume of shares traded declined by
44.29%, from 423.25 million shares in April
2014 to 235.80 million shares in May 2014.
Total turnover concomitantly declined by
29.85%, weighed down by thin trading volumes, to close the month under review at
US$36.02 million.

Market capitalization increased by 0.26% to
US$4.49 billion, at the end of May 2014,
from US$4.47 billion at the close of April
2014. On a year to date basis, however, the
ZSE’s
market
capitalization
fell
by
US$714.71 million (13.74%).

MONETARY DEVELOPMENTS

Annual growth in broad money supply increased to 7.66% in May 2014, from 6.65%
in April. In absolute terms, broad money
rose from US$4 018.14 million in May 2013
to US$4 325.73 million in May 2014. Broad
money registered a monthly increase of
2.25% between April and May 2014.

Expansions were registered in all deposit
classes with savings deposits recording the
highest annual growth of 12.5%. The growth
in money supply continued to be driven by
tobacco sales. As at end of May 2014, cumulative tobacco sales amounted to over
US$558.22 million, which represents significant inflows into the economy.
Deposits held by banks largely emanated
from utilities and local authorities, 25.78%;
households (individuals), 14.60%; financial
organizations, 20.08%; and distribution,
8.93%.
Claims on the private sector, declined marginally, from US$3 595.2 million in May
2013 to US$3 591.5 million in May 2014.
On a month-on-month basis, credit to the private sector also fell by 0.1% in May 2014,
from US$3 594.93 million recorded in April
2014.
The slowdown reflects constrained lending
by banks on the back of attendant liquidity
challenges, as well as risk aversion occasioned by increasing non performing loans.

3 5
Outstanding loans and advances were largely
in respect of agriculture (19.90%), houseINFLATION DEVELOPMENTS

Annual Inflation

On the back of declining food prices, annual
inflation remained in the negative territory.
Year on year food inflation fell from -3.73%
in April to -3.75% in May 2014, reflecting
weak domestic demand. Food inflation is expected to continue depressed in the outlook
period as a result of the favourable 2014 harvest.
holds (18.66%), distribution (17.77%), services (16.46%), manufacturing (14.44%),
mining (6.72%) and construction (1.51%).
Credit to private sector continues to be short
term in nature and mainly utilized for recurrent expenditures, 43.92%; inventory and
stocks build up, 34.42%; consumer durables,
12.06%; and capital expenditures, 6.15%.

The decrease in annual food inflation was
largely driven by vegetables; meat, sugar,
jam, honey, chocolate and confectionery; fish
and sea food; and the bread and cereals subcategories.
Annual non-food inflation, however, rose
from 1.50% in April 2014 to 1.62% in May
2014, largely driven by education; housing,
water, electricity, gas and other fuels; alcoholic beverages and tobacco; and transport
services sub-categories.
The increase in education inflation was attributed to increases in pre-primary and primary education, 21.6% and secondary education, 17.1%.
The rise in non food inflation was, however,
offset by the decline in food prices, culminating in an annual headline inflation of –0.19%
in May 2014. Although inflation remained in
the negative, the May inflation of –0.19%
represents a marginal increase from –0.26%
realized in April 2014.
Month-on-Month Inflation
Month-on-month
inflation
shed
0.71
percentage points, from 0.58% in April 2014
to -0.13% in May 2014, following decline in
non-food inflation.
Monthly food inflation gained 0.16 percentage points, from -0.46% in April to -0.30%
in May 2014, mainly driven by increases in
the prices of vegetables.
Monthly non-food inflation stood at -0.05 in
May 2014, shedding 1.14 percentage points,
from the April 2014 rate of 1.09%. The
monthly non-food inflation was driven by
education; transport; and alcoholic beverages
and tobacco. This was more than offset by
decreases in prices of clothing and footwear;
furniture, household equipment and maintenance; and recreation and culture subcategories.

Inflation Outlook
The price formation mechanism in Zimbabwe remains intricately bound to movements
in international prices, particularly for oil and
South African goods as well as utility prices
and aggregate demand levels.

NATIONAL
PAYMENTS
SYSTEM
DEVELOPMENTS

Zimbabwe Electronic Transfer Settlement
System (ZETSS)
The value of transactions processed through
the RTGS system in May 2014 decreased by
7% to US$3.2 billion, from US$3.4 billion in
April 2014 while the volume of transactions
registered an increase of 9%, from 183 626
to 200 146 in the same period.
Card Systems
The total value of card based transactions
increased by 5.2% to US$399.11 million in
May 2014, from US$379.42 million in
April 2014.
Mobile and Internet Based Transactions
The value of mobile and internet based
transactions also increased by 19%, from
US$360.67 million in April 2014 to
US$429.27 million in May 2014.
Cheques
The value of cheque transactions rose to
US$10.94 million in May 2014, from
US$9.66 million in April 2014.


Reserve Bank of Zimbabwe
June 2014

NOTES

STATISTICAL TABLES
CONTENTS

Table


. Monetary Statistics


1.1 Monetary Aggregates

1.2 Broad Money Survey

1.3 Analysis of Monthly Changes in Money Supply

1.4 Analysis of Yearly Changes in Money Supply

2. Sectoral Analysis of Bank Loans and Advances and Deposits


2.1 Sectoral Analysis of Commercial Banks Loans and Advances 15

2.2 Sectoral Analysis of Merchant Banks Loans and Advances

2.3 Sectoral Analysis of Merchant Acceptances

2.4 Sectoral Analysis of Commercial Banks Deposits

2.5 Sectoral Analysis of Merchant Banks Deposits

3. External Statistics


3.1 Total External Debt Outstanding by Debtor

4. Interest Rates


4.1 Lending Rates

4.2 Banks Deposit Rates

5. Inflation


5.1 Monthly Inflation

5.2 Yearly Inflation

6. Exchange Rates

STATISTICAL TABLES
CONTENTS

Table


. Commercial Banks


7.1 Assets

7.2 Liabilities

8. Accepting Houses


8.1 Assets

8.2 Liabilities

9. Building Societies


9.1 Assets

9.2 Liabilities

10. Zimbabwe Stock Exchange Statistics

11. Savings with Financial Institutions

12. Analysis of Liquid Assets of Monetary Banks

13. ZETSS, Cheques and Cards Activity


13.1 Values of Transactions

13.2 Volumes of Transactions

TABLE 2.1 : SECTORAL ANALYSIS OF COMMERCIAL BANKS LOANS AND ADVANCES


US$ Thousands


AGRICULTURE
CONSTRUCTION
COMMUNICATION
DISTRIBUTION
FINANCIAL
&
FINANCIAL
MANUFACTURING
MINING
SERVICES TRANSPORT
INDIVIDUALS
CONGLOMERATES/1
TOTAL
END OF


INVESTMENTS
ORGANISATIONS

JANUARY

FREBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY


FEBRUARY

MARCH

APRIL

MAY

1. These are large corporation with business operations covering across a number of sectors.
TABLE 2.2 :SECTORAL ANALYSIS OF MERCHANT BANKS LOANS AND ADVANCES


US$ Thousands


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


INVESTMENT ORGANISATIONS

JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY

FEBRUARY

MARCH

APRIL

MAY


TABLE 2.3 :SECTORAL ANALYSIS OF MERCHANT BANKS ACCEPTANCES


US$ Thousands


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


INVESTMENT ORGANISATIONS

JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY

FEBRUARY


MARCH


TABLE 2.4 : SECTORAL ANALYSIS OF COMMERCIAL BANKS DEPOSITS


US$ Thousands


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


INVESTMENTS
ORGANISATIONS

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY

FEBRUARY

MARCH


APRIL

MAY


TABLE 2.5 : SECTORAL ANALYSIS OF MERCHANT BANKS DEPOSITS


US$ Thousands


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


INVESTMENTS
ORGANISATIONS

JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY


FEBRUARY

MARCH

APRIL

MAY


TABLE 3.1: ZIMBABWE: EXTERNAL DEBT OUTSTANDING BY DEBTOR (INCLUDING ALL
ARREARS) (WITH RBZ)


End Period

(US$ millions)


Long-Term External Debt


Government

Bilateral Creditors


Multilateral Creditors

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

1,198
1,382
1,289

1,564
Supplier's Credits

Reserve Bank

Private

Total External Debt


Gross Domestic Product

External Debt / GDP


SOURCE: Ministry of
Finance and Reserve Bank
of Zimbabwe

TABLE 4.1 LENDING RATES (percent per annum)1

Commercial Banks
Merchant Banks


Weighted Average Lending
Rates3

Weighted Average Lending
Rates3
End Period
Nominal
Lending
Rates2
Individuals
Corporate
Nominal
Lending
Rates2
Individuals
Corporate

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar


Notes


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.
3. Lending rates exclude rates on staff loans.


Apr

May


TABLE 4.2 : BANKS DEPOSIT RATES (percent per annum)1


COMMERCIAL BANKS
ACCEPTING HOUSES


END OF
SAVINGS
3 MONTHS
3 MONTHS

JANUARY
0.15-8.00
4.00-20.00
6.00-17.00
FEBRUARY
0.15-8.00
4.00-20.00
6.00-17.00
MARCH
0.15-8.00
4.00-20.00
8.00-12.00
APRIL
0.15-8.00
4.00-20.00
8.00-12.00
MAY
0.15-8.00
4.00-20.00
6.00-17.00
JUNE
0.15-8.00
4.00-20.00
6.00-17.00
JULY
0.15-8.00
3.00-20.00
6.00-17.00
AUGUST
0.15-8.00
3.00-20.00
6.00-17.00
SEPTEMBER
0.15-8.00
3.00-20.00
11.00-12.00
OCTOBER
0.15--8.00
3.00-20.00
11.00-12.00
NOVEMBER
0.15--8.00
3.00-20.00
11.00-12.00
DECEMBER
0.15--8.00
3.00-20.00
11.00-12.00

JANUARY
0.15--8.00
3.00-20.00
11.00-12.00
FEBRUARY
0.15--8.00
3.00-20.00
11.00-12.00
MARCH
0.15--8.00
3.00-20.00
11.00-12.00
APRIL
0.15--8.00
3.00-20.00
11.00-12.00


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.


MAY
0.15-8.00
3.00-20.00
11.00-12.00

TABLE 5.1 : MONTHLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \1
1. Source: ZIMSTATS. To reflect changing expenditure
patterns, ZIMSTAT introduced a revised CPI basket and
rebased CPI figures to December 2012=100.

NON-FOOD INFLATION
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


AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY

FEBRUARY

MARCH


APRIL

MAY


TABLE 5.2 : YEARLY INFLATION -- PERCENTAGE CHANGE IN CONSUMER PRICE INDEX \1
1. Source: ZIMSTATS. To reflect changing expenditure
patterns, ZIMSTAT introduced a revised CPI basket and
rebased CPI figures to December 2012=100.

NON-FOOD INFLATION
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


JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY

FEBRUARY

MARCH

APRIL

MAY


TABLE 6 : SELECTED INTERNATIONAL EXCHANGE RATES


SA
BW
JAPANESE
EUROPEAN
POUND
END OF
RAND/1
PULA/1
YEN/1
CURRENCY/2
STERLING/2

JANUARY

FEBRUARY

MARCH

APRIL

MAY

JUNE

JULY

AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER


JANUARY

FEBRUARY

MARCH

APRIL

MAY


1. Foreign currency per US Dollar.


2. US Dollar per unit of foreign currency.

TABLE 7.1: COMMERCIAL BANKS - ASSETS


US$ Millions


Liquid Assets


Securities


Loans & Contingent
Other
Non Financial
Total
End of
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

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug.

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May


TABLE 7.2: COMMERCIAL BANKS - LIABILITIES
US$ Millions


Deposits


Amounts Owing to
Capital
Contingent
Other
Total
Of which


and
Liabilities Liabilities Liabilities Liabilities
to the
End of
Demand
Savings and
Short-term
Long-term
Total
Foreign
Liabilities
RBZ
Other Banks Reserves


Public


Deposits

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May


TABLE 8.1 : ACCEPTING HOUSES - ASSETS
US$ Millions


Liquid Assets


Loans & Contingent
Other
Non Financial
Total
End of
Notes


Total
Other
Balances Advances
Assets
Assets
Assets
Assets

&
Balances Balances Balances


Liquid
with RBZ


Coin
with
with Other
at
Trade
Treasury
Assets


at Banks
RBZ
Banks
Foreign
Banks
Bills
Bills

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May


TABLE 8.2 : ACCEPTING HOUSES - LIABILITIES
US$ Millions


Of which


Deposits


Amounts Owing to
Capital
Contingent
Other
Total
Liabilities to the


and
Liabilities
Liabilities
Liabilities
Public
End of Demand Savings and
Short-term
Long-term
Total
Foreign
Liabilities
RBZ
Other
Banks
Reserves


Deposits

May

Ͳ99.4

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May


TABLE 9.1 : BUILDING SOCIETIES - ASSETS
US$ Millions


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

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May


TABLE 9.2 : BUILDING SOCIETIES - LIABILITIES
US$ Millions


Of which

Deposits
Capital
Other
Total
Liabilities to the


and
Liabilities
Liabilities
Public
End of
Savings and
Short-term
Long-term
Total
Reserves


Deposits

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Jan

Feb

Mar

Apr

May


Table 10: ZIMBABWE STOCK MARKET STATISTICS


Indices
US$ Millions

Industrial
Mining
Market Capitalisation

Aug
132.27
89.04
3,434.00
Sep
146.00
96.00
3,822.80
Oct
154.47
93.66
4,033,76
Nov
150.16
68.74
3,890.9
Dec
152.40
65.12
3,963.50

Jan
179.34
84.07
4,700.33
Feb
182.3
72.01
4,748.24
Mar
183.88
66.21
4,726.34
Apr
189.66
71.98
4,894.68
May
212.72
73.99
5,471.22
Jun
211.19
73.29
5,436.57
Jul
232.87
66.77
5,9136.78
Aug
181.67
48.73
4,682.27
Sep
200.05
49.90
5,157.20
Oct
209.74
52.68
5,407.42
Nov
213.04
47.02
5,482.03
Dec
202.12
45.79
5,203.13

Jan
189.25
35.40
4,882.11
Feb
189.45
39.24
4,906.94
Mar
176.32
29.51
4,560.29


Source: Zimbabwe Stock Exchange (ZSE)

Apr
172.91
29.64
4,473.51
May
174.89
35.45
4,485.11

TABLE 11 : SAVINGS /1 WITH FINANCIAL INSTITUTIONS


US$ Millions


Commercial
Merchant

Building

End of
Banks
Banks
Other/2
Societies
TOTAL

January

February

March

April

May

June

July

August

September

October

November

December


1/ Comprises all deposits other than demand deposits.
2/ Includes People’s Own Savings Bank (POSB).

January

February

March

April

May


TABLE 12 : ANALYSIS OF LIQUID ASSETS OF MONETARY BANKS


US$ Millions


Commercial Banks
Accepting Houses


Liquid
Prescribed
Excess
Liquid
Prescribed
Excess

assets
liquid
liquid
assets
liquid
Liquid
End of
held
assets/1
assets
held
assets/1
assets

January

February

March

April

May

June

July

August

September

October

November

December


1/ With effect from May 2012, the prescribed liquid asset ratio was reviewed to 30% of liabilities to the public.

January

February

March

April

May


TABLE 13.1 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY
Values of Transactions (US$ in millions)
MONTH
ZETSS
CHEQUE
POS
ATM
MOBILE
INTERNET

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Annual Total


Jan


Feb

Mar

Apr

May


TABLE 13.2 : ZETSS AND RETAIL PAYMENTS TRANSACTIONAL ACTIVITY
Volumes of Transactions (in thousands)
MONTH
ZETSS
CHEQUE
POS
ATM
MOBILE
INTERNET

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec


Annual Total


Jan

Feb

Mar

Apr

May

38.68