•  Historic Trade Deficit Reduction: Zimbabwe’s trade deficit plummeted by 94.5% to a record-low USD 8.7 million in July 2025 from USD 158.6 million in June
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• Gold’s Dominant Role: Gold exports, accounting for over 50% of total exports, soared to USD 2.3 billion from January to July 2025, a 109% increase from USD 1.1 billion in 2024
• Economic Impact: The export boom, particularly in gold, nickel, and tobacco, has boosted US dollar inflows, easing pressure on foreign exchange reserves

Harare- Zimbabwe has achieved a historic milestone by recording its lowest trade deficit ever in July 2025, with the deficit plummeting by 94.5% to USD 8.7 million from USD 158.6 million in June 2025. This performance was driven by a significant surge in exports, particularly high gold earnings, coupled with a narrowed import base due to reduced wheat imports.

The boost in export revenues, especially from gold, has not only strengthened Zimbabwe’s trade position but also injected a substantial amount of US dollars into the economy, enhancing liquidity and supporting the local currency.

The increased dollar concentration in the market is expected to stabilise the Zimbabwe Gold currency, fostering economic confidence and potentially attracting further investment.

In July 2025, Zimbabwe’s total exports soared to USD 877.5 million, marking a robust 21.3% increase from USD 723.5 million in June 2025. The standout performer was gold, with export earnings rising to USD 457.54 million from USD 393.87 million, despite a slight decline in gold deliveries to Fidelity from 4.27 tonnes to 4.2 tonnes.

This increase was fueled by a marginal 0.3% rise in global gold prices to approximately USD 3,299 per ounce, driven by heightened global skepticism stemming from the failure of Russia and the USA to resolve the Ukraine War, alongside rising inflation expectations and tariff tensions.

Other key export commodities also contributed significantly, with nickel mattes increasing from USD 91.7 million to USD 139.89 million and unmanufactured tobacco jumping from USD 43 million to USD 73 million. The strong export performance, particularly in gold, shows Zimbabwe’s growing role in the global commodities market and its potential to leverage high-value exports to bolster economic growth.

Gold is Zimbabwe’s biggest forex earner and year to date, from January to July 2025, 2.3 billion has been accumulated compared to 1.1 billion in the same period last year. Cumulatively in 2024, 2.5 billion was obtained, almost surpassed by the 7-month output in 2025. In terms of output, year-to-date gold deliveries to Fidelity stand at 24.3 tonnes from 17.4 tonnes, and cumulative 2024, 36.37 tonnes were produced. Zimbabwe is targeting no lesser than 40 tonnes.

Gold earnings in US$ millions

On the import side, July 2025 saw a modest 0.5% increase, with total imports rising to USD 886.2 million from USD 882.1 million in June 2025. This slight uptick was driven by marginal increases in diesel (1% to USD 98 million), leaded petrol (4% to USD 42 million), and crude soybean oil (10% to USD 22 million).

However, a sharp decline in durum wheat imports, from USD 36 million to USD 12 million, significantly offset these increases, contributing to the narrowed trade deficit. The reduction in wheat imports reflects a strategic shift in import priorities, possibly due to improved domestic agricultural output or policy-driven efforts to curb non-essential imports.

This disciplined approach to imports, combined with the export boom, has not only reduced the trade deficit but also alleviated pressure on foreign exchange reserves, providing the government with greater fiscal flexibility to address developmental priorities.

The record-low trade deficit and the surge in high-value exports like gold signal a positive trajectory for Zimbabwe’s economy. Historically, the country’s lowest trade deficit was USD 32 million in August 2021, making the July 2025 figure of USD 8.7 million a significant achievement.

The increased export earnings, particularly from gold, nickel, and tobacco, are expected to have a ripple effect across the economy, enhancing foreign currency availability and supporting local industries. This development is particularly timely as the government faces ongoing challenges in meeting its export retention obligations, which require exporters to surrender 30% of their foreign currency earnings.

The strengthened US dollar concentration in the market will likely ease these pressures, enabling the government to stabilize the local currency and fund critical imports such as fuel and agricultural inputs. Moving forward, sustaining this export-driven growth and maintaining disciplined import policies will be crucial for Zimbabwe to further reduce its trade deficit and solidify its economic recovery.

Therefore, the record-low trade deficit, surpassing the previous low of USD 32 million in August 2021, shows the transformative impact of high export earnings on Zimbabwe’s economy. The global gold market’s upward trend, driven by safe-haven demand and inflationary pressures, is likely to continue supporting Zimbabwe’s export revenues in the near term, further strengthening the ZWG.

This increased foreign currency inflow enhances the government’s capacity to meet its export retention obligations, reducing the risk of currency devaluation and supporting monetary policy efforts to stabilise the economy.

However, the ZiG's short-term gains could be tempered by structural challenges, such as reliance on a few key exports and vulnerability to global market volatility. To sustain these economic gains, Zimbabwe must diversify its export base and maintain disciplined import policies while capitalizing on favourable global gold market trends to ensure long-term currency stability and economic resilience.

 Equity Axis News