Mishma Chakanyuka, Staff Writer 
9
IH SECURITIES (IH), a local equities and research firm, says it expects an uptick in performance by key economic industries like mining, agriculture and construction to improve consumer disposable incomes in 2023.
The economy is expected to grow by about four percent, driven by the mining, agriculture and construction industries. IH said it expects this growth to be reflected in consumer disposable incomes.
“Despite oil prices forecasted to remain high, which translates to persisting inflation, we expect consumer spending to remain resilient as already evidenced in 2022 sales volumes.
“Despite oil prices forecasted to remain high, which translates to persisting inflation, we expect consumer spending to remain resilient as already evidenced in 2022 sales volumes.
“On this background, we are of the view that demand should register a modest increase in 2023, reflecting the growth of the economy,” IH said.
Mining is expected to grow by 10,4 percent in 2023, supported by above-average hard commodity prices and increased output on the ground, while agriculture is expected to grow by a more modest four percent, assuming normal to above-normal rainfall. According to IH, hectarage for the summer cereal crop is up 34 percent year-on-year in 2023, feeding into value chain additions downstream. IH is of the view that despite this being an election year, consumer demand is likely to be influenced by performances in anchor sectors as opposed to the election cycle.
Mining is expected to grow by 10,4 percent in 2023, supported by above-average hard commodity prices and increased output on the ground, while agriculture is expected to grow by a more modest four percent, assuming normal to above-normal rainfall. According to IH, hectarage for the summer cereal crop is up 34 percent year-on-year in 2023, feeding into value chain additions downstream. IH is of the view that despite this being an election year, consumer demand is likely to be influenced by performances in anchor sectors as opposed to the election cycle.
The firm said there are signals off the bottom of the pyramid for consumer liquidity in 2023 that will drive volumes.
“On this background, we are of the view that demand should register a modest increase in 2023, reflecting growth of the economy,” read the report.
IH further noted that it is anticipating increased US dollar sales for businesses as the economy continues to dollarise and as foreign currency earnings and exports are also expected to grow.
“On this background, we are of the view that demand should register a modest increase in 2023, reflecting growth of the economy,” read the report.
IH further noted that it is anticipating increased US dollar sales for businesses as the economy continues to dollarise and as foreign currency earnings and exports are also expected to grow.
“We hope this increase will be felt by businesses, thus reducing the cost associated with accessing foreign currency for operations,” IH said. Margins, however, might come under pressure owing to increasing costs emanating from high fuel prices and power disruptions, which call for alternative sources of energy.
Meanwhile, demand for consumer staples in 2023 is expected to be supported by the reinstatement of import duties on basic goods, pointing to improved performance for the consumer staples industry.
The securities firm is of the view that the expected economic growth will also reflect within the financial industry as the need to fund development within sectors arises.
The securities firm is of the view that the expected economic growth will also reflect within the financial industry as the need to fund development within sectors arises.
Analysts expect the acceleration in local economic growth in 2023 to be driven by a more expansionary fiscal policy in the run-up to elections in the middle of the year and an easing of price pressures, which should provide further support to consumers.
newsdesk@fingaz.co.zw
newsdesk@fingaz.co.zw
