Zimbabwe’s inflation declines further

ZIMBABWE’S year-on-year inflation as measured by the Consumer Price Index (CPI) increased by 1,87 percentage points between June 2012 and June 2013, figures released by Zimbabwe National Statistics Agency (ZimStat) show.

Taurai Mangudhla

However, prices decreased by an average 0,13% from May to June as the month-on-month inflation rate in June 2013 was -0,13 %, gaining 0,08 percentage points on the May 2013 rate of -0,21%, according Zimstat.

Year-on-year inflation performance shed 0,33 percentage points on the May 2013 rate of 2,20%.

The statistics agency said year on year food and non alcoholic beverages inflation stood at 2,90% whilst the non food inflation rate was 1,35%.

Month-on-month food and non alcoholic beverages inflation stood at -0,33% in June, shedding 0,05 percentage points on the May 2013 rate of -0,28% whilst the month-on-month non-food inflation stood at -0,03%, gaining 0,14 percentage points on the May 3012 rate of -0,17%.

The CPI for the month ending June 2013 stood at 100,81 compared to 100,94 in May 2013 and 98,97 in June 2012.

This comes as economic experts have predicted a further decline in Zimbabwe’s inflation rate as the country’s economy slows down and local prices track the declining value of the South African rand, resulting in generally decreasing local prices.

The softening of the South African Rand since the beginning of the year has helped Zimbabwe maintain a downward trend as it imports close to 60% from its southern neighbour.

Analysts say the depreciation of the South African currency is a result of the unending job disputes in the mining sector, particularly among platinum producers, a development that has seen output declining.

Last month, Zimstat reported year-on-year inflation rate for the month of May 2013 dipped 0,29 to 2,20% from the April 2013 rate of 2,49%.

However, while prices as measured by the all items CPI increased by an average of 2,20 percentage points between May 2012 and May 2013, the month-on-month statistics showed that prices are actually falling.

The month-on-month inflation rate in May 2013 was -0,21% which was 0,14% lower than the April 2013 rate of -0,07%.

The Reserve Bank of Zimbabwe (RBZ)’s latest monthly economic review states that the decelerating inflation is on the back of depressed domestic economic activity and tight liquidity conditions.

Going forward, the RBZ said inflation was expected to remain low and stable, though largely depending on the movement of international oil prices, the US$/Rand exchange rate developments, as well as fluctuations in the level of aggregate demand in the economy.

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