ZIMBABWE’S domestic debt has ballooned to $10 trillion from $7 trillion as of April this year as government continues to borrow from local banks to finance its budget deficit.
Latest figures from the Reserve Bank also show that broad money supply (M3) growth increased from 219,4% in November last year to 222,6% in December.
The increase was against a background of steady deceleration in M3 growth for most of last year from a peak of 490,9% recorded in January.
M3 refers to the sum of notes and coins in circulation plus demand, savings and time deposits with the banking system. Over the past two months, the market has been experiencing daily average shortages of $920,7 billion.
This year the country is expected to record gross domestic product rate of 2-2,5%, down from the initial forecast of 3-5%.
The revised decline in GDP has been blamed on poor performance in the agricultural sector.
GDP is one of the key factors in measuring a nation’s economic performance.
Over the past four years, major contributors towards GDP growth, namely mining, agriculture, tourism and manufacturing, have been in a freefall since government embarked on the ill-planned land reform programme.
The manufacturing sector has declined by more than 35%. The critical situation can only make things worse. Tobacco production, once the country’s major foreign currency earner, has gone down by nearly 60%.
Tourism at its peak contributed 6,5% towards GDP while agriculture and manufacturing, contributed 16% and 18% respectively.
Zimbabwe is in its sixth year of economic recession, which was largely caused by the 2000 farm and company invasions.
The company invasions led to the resignation of former Industry and International Trade minister Nkosana Moyo.