Government borrowing drives domestic credit

ZIMBABWE’S domestic credit grew by 22,79 percent in the third quarter of 2023, reaching $13,2 trillion, according to data from the Reserve Bank of Zimbabwe (RBZ).
This growth was fuelled primarily by a $2,9 trillion increase in net government borrowing, which rose from a negative $321 million in June to a positive $2,6 billion by September.
While government borrowing skyrocketed, credit extended to other sectors of the economy declined, slipping from $11,1 trillion to $10,6 trillion.
This comes as Zimbabwe’s public and publicly guaranteed (PPG) debt burden remains substantial. As of September 2023, total PPG debt stood at a staggering $96,7 trillion, representing 81,3 percent of GDP.
This comprises $69,4 trillion in external debt and $27,4 trillion in domestic debt, equivalent to 58,3 percent and 23 percent of GDP, respectively.
In US dollar terms, total PPG debt amounted to US$17,7 billion, with external debt making up US$12,7 billion — 72 percent — and domestic debt US$5 billion, or 28 percent.