Zimbabwe's trade deficit declined 25.7 percent to 1.76 billion U.S. dollars in the six months to June this year, down from 2.37 billion U.S. dollars recorded during the same period last year.
However, the narrowing gap was mainly contributed to depressed demand and liquidity challenges rather than a boost in manufacturing.
According to figures released by the Zimbabwe National Statistics Agency (Zimstats) Tuesday, imports amounted to 2.99 billion U.S dollars, down from 3.92 billion U.S dollars last year while exports were at 1.22 billion U.S. dollars, down from 1.54 billion dollars in 2013.
Economists predict that trade deficit would close the year lower at 3.2 billion dollars from 3.5 billion dollars last year.
Increased revenue from tobacco, the country's largest foreign currency earner in the agriculture sector, has helped narrowing the gap. Zimbabwe has so far earned 650 million U.S. dollars from the sale of 204 million kg of tobacco leaf, up from 616 million U. S. dollars earned from the sale of 166 million kg last year.
The International Monetary Fund, in its latest report on Zimbabwe, predicted an improvement in the country's current account balance over the medium term though it warned the deficit was expected to remain high, averaging around 15 percent of the gross domestic product (GDP).
Zimbabwe's once robust manufacturing sector started to crumble in early 2000s when the economy slipped into a decade-long recession.
Since 2009, the economy has slowly recovered, but mostly on the back of a mining boom and the consumer market remains dominated by imports from South Africa, the country's largest trading partner./.