Source: ‘Economy stable despite external shocks’ – herald
Debra Matabvu
Senior Reporter
THE economy has remained resilient in the first quarter of 2026 despite growing geopolitical tensions in the Middle East that have triggered global uncertainty, higher energy prices and commodity market volatility, Information, Publicity and Broadcasting Services Minister Dr Zhemu Soda said yesterday.
Addressing the post-Cabinet media briefing yesterday, Dr Soda said the domestic economy had withstood external shocks due to sustained macro-economic stability, improved agricultural activity and ongoing policy reforms aimed at improving the ease of doing business.
“The first quarter of 2026 was characterised by elevated global uncertainty, primarily reflecting escalating geopolitical tensions in the Middle East, which have contributed to higher energy prices, increased commodity price volatility and unfavourable global financial conditions,” he said.
“The developments pose downside risks to the outlook of the domestic economy through their impact on the balance of payments, agriculture output (fertiliser shortages), inflation, exchange rate and foreign reserves build-up.
“To date, the domestic economy has remained broadly resilient, anchored by sustained macroeconomic stability and the successful rainfall season that has underpinned agricultural activity and continued policy reforms that are supporting and enhancing the ease of doing business.”
The Government, Dr Soda said, projects economic growth of around 5 percent this year, driven mainly by recovery in agriculture and continued growth in the mining sector.
He said fiscal performance remained stable, with projected revenues of US$9,4 billion against expenditure of US$9 billion, while authorities had already collected US$2 billion in the first quarter of the year.
“This performance reflects improved revenue collection and effective expenditure management,” he said.
The Government has also introduced measures to cushion citizens and productive sectors from rising global costs linked to the Middle East crisis, Minister Soda said.
“However, elevated fertiliser prices and higher shipping and insurance costs are increasing agricultural input costs, with potential adverse effects on crop yields, food security and overall economic activity.
“Government has already removed some of the taxes on diesel, thereby helping to contain costs and inflation and support growth endeavours,” he added.
Minister Soda noted that annual inflation continued to decline significantly from the high levels recorded last year.
Year-on-year inflation declined sharply from elevated levels last year, where it peaked above 90 percent mid-year to 4,1 percent in January this year after a year of very low monthly inflation, before easing further to 3,8 percent in February and then slightly increasing to 4,4 percent in March due to the Middle East-related crude oil price shock.
Added Dr Soda: “This sustained decline highlights the effectiveness of stabilisation measures implemented by the Government.
“In the outlook, export performance is expected to remain relatively strong, supported by gold, other minerals including platinum group of minerals, lithium and tobacco in the medium term.”
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