Zimbabwe economy: Latest on GDP, inflation and banking environment



MBCA Bank Ltd, the Zimbabwean subsidiary of South Africa's Nedbank, have updated the financial markets with key economic data out of Zimbabwe.

The economic data comes in the wake of the latest Monetary Policy Statement from The Reserve Bank of Zimbabwe Governor, Dr. G. Gono.

Zimbabwean economic growth


The economy is estimated to have grown by 8.1% in 2010 supported by growth in mining (47%) and agriculture (34%).

According to MBCA the increase in GDP growth from 2009’s 5.7% reflects general economic stability, and favorable conditions of trade.

Zimbabwe inflation


Year on year inflation as at November 2010 stood at 4.2%, however latest figures show December’s year on year inflation at 3.2%.

"Inflation has generally been stable reflective of a more stable currency in use. However, going forward increases in fuel prices and production costs due to wage increases will likely push inflation up. Inflation continues to be driven by USD/ZAR movements and as long as we remain a net importer these will impact negatively on inflation," reads the report.

Banking deposits


Total deposits in the banking system increased from US$1.4 billion in January to US$2.1 billion in November 2010.

Major sources of deposits were from the service industry (27.5%) and households (16.9%). Volatile short term deposits, however, accounted for more than 90% of total deposits.

A sign of improved confidence in the Banking sector. However the growth in deposits was pushed by other sectors, i.e. mining, tobacco and telecommunications except the business community, showing that business confidence could be low and some businesses do not have excess funds to deposit.

Credit


Credit to the private sector grew from US$759.6 million in January 2010 to US$1, 485 billion in November 2010.

The major beneficiaries were agriculture (22.3%), manufacturing (20.3%), distribution (20%), households (7.6%) and mining (6.7%). The average loans to deposit ratio rose to 76.2% in October, before declining to 68.8% in November,

The almost doubling in lendings from last year’s figures reflects an improvement in the Banks’ intermediation role.