shloboe boe
Nqobile Bhebhe, [email protected]
STOCK broking firm Morgan & Co has said Zimbabwe’s monetary policy stance marked by tight liquidity for both the Zimbabwe Gold (ZiG) and US dollars has positively influenced currency stability, reducing the gap between the black market and official exchange rates.
In its Zimbabwe 2025 outlook report released last week, Morgan & Co said the country is poised for a possible current account surplus, albeit tight, due to an expected trade surplus.
It said the elevated gold price and stronger tobacco sales expectations are anticipated to keep exports high while food and energy imports are set to decline on account of the recovery in the agriculture and utilities sectors from the second quarter of 2025 onwards.
“In addition, the expected weakening of the US dollar will likely result in imports declining because of weaker purchasing power,” reads part of the report.
The firm said the projected development is also expected to ease the shortage of foreign currency in 2025, and this will be complemented by the positive trend in international remittances.
“That said, allocation efficiencies over foreign currency raised through export retentions will remain a key concern throughout 2025,” read the report.
The firm said gold receipts which account for 30 percent of mining sector receipts will continue growing but at a much slower pace because of the impact of La Nina and waning central banks’ purchases on output and prices.
Local gold output surged to 36,6 tonnes in 2024 after tax incentives to small-scale miners saw a significant recovery in deliveries from March 2024.
“However, heavy rains on the back of La Nina will likely result in depressed output in the first quarter of 2025. The sector also enters 2025 with an elevated gold price hovering around US$2,650/oz.
“However, we are cognisant of waning central banks’ purchases and interest rate cuts which will slow the gold price rally in 2025,” said Morgan & Co.
On diaspora remittances, it said they rose by 16,5 percent in the nine months to 2024 to an estimated US$1,9 billion.
The firm noted that the key to the sustained growth has been the continued migration of Zimbabweans to countries such as South Africa and the United Kingdom.
“We anticipate this figure to continue rising in 2025 as lower interest rates tilt cost-benefit analyses towards resuming shelved projects and, in turn, recruitment in developed markets throughout the year regardless of global risks,” said Morgan & Co.
“The dollar-denominated free funds accruing from the continued migration will continue to serve as an indirect buffer for foreign currency in Zimbabwe in 2025.”
According to the report, load-shedding is projected to moderate this year.
