Zimbabwean manufacturers expect production to increase to 61% of capacity this year due to the expected stability of the foreign exchange market and lower inflation.
The Zimbabwe Industry Federation (CZI) said occupancy rates rose from 36.4% in 2019 to 47% last year after the government introduced a forex auction that offered dollars with easy access to businesses.
Local industries also benefit from increased domestic demand as imports were restricted after most countries, including Zimbabwe’s largest trading partner, South Africa, closed their borders as part of a blockade to fight the Covid-19 pandemic. Received.
“Certainty and predictability have been introduced into the economy. Auctions have fostered some confidence and confidence in the policy-making and implementation process,” CZI said.
However, CZI said most companies are still facing difficulties in obtaining working capital, the high costs of maintaining a business during the Covid-19 blockade, and the loss of some export markets due to a pandemic.
The central bank expects inflation to drop from 321.59% in February to less than 10% at the end of the year, based on economic recovery from stable exchange rates and improved agricultural outlook.
Prior to the introduction of foreign currency auctions, most companies bought forex in the black market, and Zimbabwe dollars traded at a higher rate than the official exchange rate, passing the cost on to consumers.
Manufacturing’s contribution to gross domestic product shrank from 22% in 2000, before the long-term economic crisis and hyperinflationary attacks, to about 10%.
Zimbabwe Manufacturing Bullish-Moneyweb
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