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TREASURY QUARTERLY BULLETIN:

October -December 2012

Ministry of Finance

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Table of Contents

INTRODUCTION .......................................................................................................................................... 3

ECONOMIC OVERVIEW .............................................................................................................................. 3

Real Sector............................................................................................................................................... 6

Agriculture ........................................................................................................................................... 6

Mining ................................................................................................................................................. 10

Manufacturing ................................................................................................................................... 12

Electricity ................................................................................................................................................ 15

Prices ...................................................................................................................................................... 16

BUDGET PERFORMANCE ..................................................................................................................... 17

FINANCIAL SECTOR ............................................................................................................................. 22

Deposits.............................................................................................................................................. 22

Interest on Deposits ......................................................................................................................... 23

Total Bank Credit .............................................................................................................................. 26

Zimbabwe Stock Exchange.............................................................................................................. 29

Market Capitalisation ........................................................................................................................ 30

EXTERNAL SECTOR .............................................................................................................................. 31

Exports ................................................................................................................................................... 31

STATISTICAL TABLES .............................................................................................................................. 37

2012 Monthly Revenue and Expenditure figures (US$) .................................................................. 37

Inflation December 2008 December 2012 .................................................................................... 42

BOP Summary (US$m)......................................................................................................................... 44

Monthly Foreign Payments in USD - Jan-Dec 2012 ......................................................................... 48

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INTRODUCTION

1. The 4th quarter being an economic pointer concludes the 4th series of

2012 Treasury Bulletins. Whilst it provides an update on macro-

economic and fiscal developments for the period October to December

2012, it also provides an update for the year 2012.

ECONOMIC OVERVIEW

Real sector

2. The overall economic slowdown, which was noted in the 3rd quarter

during preparations of the 2013 National Budget is expected to have

continued into last quarter of 2012. As a result, overall growth of 4.4%

for 2012 as reflected in the Budget is still anticipated.

3. Based on the above, agriculture performance was revised upwards to

4.6% from an earlier projection of -5.8%, reflecting higher output of

tobacco and cotton.

4. In the last quarter, mining maintained its leading position in economic

recovery and is estimated to have grown by 10.1% in 2012.

5. Manufacturing, however, continued to face a number of challenges

related to operation of obsolete machinery, power outages and lack of

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funding, among other factors. Growth in the sector is therefore

estimated to have recorded 2.3% against the 13.9% growth of 2011.

6. Revised estimates for all other sectors as indicated in the 2013 National

Budget are shown below:

Sectoral performance (% Growth): 2009-2012 2009

Actual

2010

Actual

2011

Actual

2012

Est.

Agriculture, hunting and fishing 21.0 34.8 5.1 4.6

Mining and quarrying 33.3 60.1 25.1 10.1

Manufacturing 10.0 -4.0 15.0 2.3

Electricity and water 1.9 19.1 7.8 0.3

Construction 2.1 5.4 6.2 4.9

Finance and insurance 4.5 5.6 2.0 5.1

Real estate 2.0 5.4 3.1 4.9

Distribution, hotels and restaurants 6.5 8.8 4.3 3.9

Transport and communication 2.2 20.5 18.7 5.8

Public administration 2.0 0.0 4.8 3.0

Education 2.8 0.5 0.5 1.4

Health 3.2 15.8 10.0 2.5

Domestic services 2.2 6.7 0.4 1.5

Other services 2.3 14.6 10.9 5.0

GDP at market prices 5.4 9.6 10.6 4.4

Public finances

7. The Budget Performance during the last quarter of 2012 remained

under pressure with revenue collections during the quarter recording

US$996.5 million against US$821.5 million collected during the same

period in 2011. This brings cumulative revenue for the year to US$3.5

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billion against a revised target of 3.65 billion, primarily reflecting

underperformance of diamond revenue.

8. On the expenditure side, of the total of US$3.6 billion, recurrent

expenditure absorbed US$3.2 billion to leave about US$0.301 billion for

capital development projects.

Financial sector

9. In the financial sector, month on month growth in broad money was

marginal with growth of about 2% in October and 0.28% in November

2012. By end of November 2012, total deposits reached US$3.8 billion

against total lending of US$3.4 billion.

Inflation

10. Annual inflation remained contained below 5%, reaching its lowest level

in December 2012 at 2.9% from 3.4% for October and 3.0% for

November. This was the lowest annual inflation recorded for the year.

External Sector

11. Exports in the 4th quarter of 2012 stood at US$1.2 billion, up from

US$1.1 billion of the previous quarter. Cumulatively, exports for 2012

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are estimated at US$3.8 billion, against total imports of US$7.5 billion.

This gives a deficit of around US$3.6 billion which is unsustainable.

Real Sector

Agriculture

Notwithstanding a prolonged dry spell during the last quarter of

2012, the country received normal rainfall from the last week of

December 2012 enhancing opportunities for the 2012/13 summer

cropping programmes. Therefore if the above weather pattern is

maintained, crop output projections for the 2012/13 season may be

attained.

Agriculture Production (000 tons)

2011

Actual

2012 Mid Year

Projection

Revised 2012

Projection

2013

Projection

Tobacco 133 130.0 144.5 170

Maize 1,452 968.0 968.0 1,400.0

Beef 94 94.0 94.0 94.1

Cotton 250 255.0 350.0 283.0

Sugarcane 3264.6 4,476.9 4,476.9 4,500.0

Horticulture 45 51.0 51.0 54.3

Poultry 65 70.5 70.5 80.0

Groundnuts 231 120.0 120.0 130.0

Wheat 53 17.0 17.0 17.4

Dairy (m lt) 63 64.5 64.5 70.0

Coffee 2.7 1.9 1.9 1.5

Soyabeans 84 70.5 70.5 115.0

Tea 25 24.5 24.5 25.0

Paprika 4 4.0 4.0 4.5

Pork 13 13.8 13.8 15.0

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2011

Actual

2012 Mid Year

Projection

Revised 2012

Projection

2013

Projection

Wildlife 47 48.0 48.0 49.0

Sorghum 95 64.8 64.8 114.0

Barley 44 44.0 44.0 44.0

Sheep & goats 4 6.3 6.3 3.0

Sunflower 12 15.0 15.0 17.0

Ostriches 17 17.0 17.0 19.0

Overall Growth 5% -5.8% 4.6% 6.4%

Source: MoAMD.MoEPIP, MoF and RBZ

Grain Deliveries

12. During the last quarter of 2012, disbursements for grain delivered to

Grain Marketing Board (GMB) amounted to US$3.29 million. This

amount takes into account payments for grain delivered in the 2011/12

season.

2011/2012 GRAIN PROCUREMENT PROGRAMME: 4th

Quarter

Period Maize (US$295/ton) Wheat (US$466/ton) Small Grains

(US$295/ton)

Total

Tonnage Value Tonnage Value Tonnage Value Tonnage Value

Mt US$ Mt US$ Mt US$ Mt US$

October 2,942 867,761 5 2,511 147 43,303 3,094 913,575

November 587 173,164 2,301 1,072,162 - - 3,271 1,358,385

December - - 2,193 1,021,730 - - 1,094 1,021,730

TOTAL 3,529 1,040,925 4,499 2,096,403 147 43,303 7,459 3,293,690

Source: GMB

13. Deliveries of maize and small grains were depressed in the last quarter

of 2012 owing to the drought experienced in the 2011/12 agricultural

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season and the r