Harare, (New Ziana) – Zimbabwe’s terms of trade (TOT) index was favourable last March although the all month-on-month index dropped by 2.9 percent from the previous month, the Zimbabwe National Statistical Agency (ZimStat) reported on Wednesday.
The Zimstat report is meant to provide insight into the competitiveness of the country’s goods and trade balance covering the period from January 2019 to last March year.
ZimStat said the trade indices that were being revived after having been last compiled in 1987, show that the all-items export index increased by 4.6 percent from 374 in March 2023 to 391.1 in March 2024.
The export price index is a measure of the percentage change in the prices of goods that a country sells to other nations during a specific period.
It is a useful tool to evaluate how competitive a country’s exports are in the global market with an increase in the export price index indicating that a country is receiving higher prices for exported goods, which positively impacts the trade balance.
The import price index (IPI) measures the percentage change in the prices of goods that a country buys from other nations during a specific period and is used to evaluate the effects of changes in the cost of imports.
An increase in the import price index indicates that the cost of imported goods is rising.
If a country’s TOT is above 100, it has favourable or positive terms of trade, implying that for the same amount of exports, it can purchase more imports. If a country’s terms of trade (TOT) is below 100, it implies an unfavourable or negative balance of trade, meaning that for the same amount of exports, it can purchase fewer imports.
“The all items export index dropped by 2.0 percent month on month from 399.1 in February to 391.1 in March 2024 whilst the all items import index increased marginally by 0.9 percent from 383.3 to 386.9 in the same period respectively,” ZimStat said.
“The all items export index increased by 4.6 percent from 374.0 in March 2023 to 391.1 in March 2024. However, the all items import index decreased year-on-year by 6.2 percent from 412.3 in March 2023 to 386.9 in March 2024.”
“The terms of trade index remained favourable in March 2024 although the all month-on-month all items terms of trade index dropped by 2.9 percent from 104.1 in February 2024 to 101.1 in March 2024. Consequently, the Terms of Trade year-on-year index increased by 11.4 percent from 90.7 in March 2023 to 101.1 in March 2024.”
The average quarter-to-quarter export indices increased by 17.9 percent from 317.2 in the fourth quarter 2023 to 373.9 in the first quarter 2024 whilst import indices dropped by 1.4 percent from 377.0 to 371.9 in the same period respectively.
The average year-on-year quarterly export indices increased by 1.8 percent from 367.2 in the first quarter 2023 to 373.9 in the first quarter 2024, whilst the year-on-year import indices dropped by 7.4 percent from 401.7 to 371.9 in the same period respectively.
There was an 18.4 percent increase in the quarterly terms of trade index from 84.8 in the fourth quarter 2023 to 100.4 in the first quarter 2024.
The year-on-year quarterly terms of trade index also increased by 9.5 percent from 91.7 in the first quarter 2023 to 100.4 in the first quarter 2024.
New Ziana
