ZIMBABWE’S year-on–year inflation slowed to 3,97% in June, helped by a moderation in the prices of fuel, food and non-alcoholic beverages , figures released by Zimstats this week show.
Month-on-month inflation, however marginally gained 0,13% to 0,20% in June.
Statistics show that annual inflation, as measured by change in the Consumer Price Index (CPI), last month shed 0,05% from 4,02% recorded in May, largely attributable to the downward movement of global crude oil prices, and the weakening of the South African rand against the US dollar.
The current weak global economy has resulted in a drop in crude oil prices which have as at the beginning of the year exerted inflationary pressures on many oil-importing economies like Zimbabwe.
Year on year inflation in the transport sector went down by 1,01%, helped by a marginal 0,39% drop in fuel and lubricants prices. The month-on-month index for transport also declined by 0,15%.
Food and non-alcoholic beverages inflation, which is prone to transitory shocks, stood at 4,79% year-on-year, and was up 0,54% to 0,29% month-on-month. Non-food inflation was up 3,61% year-on-year but shed 0,05% to 0,16% month-on-month. .
Food and non-alcoholic beverages, which have a weighted 31,93% on the all items index, rose marginally owing to a weaker rand, given that Zimbabwe currently imports most of her basic commodities from South Africa.
A breakdown of the food index shows that the price of fruits in the period under review went down by 4,49%, while that of vegetables was down by 0,61%. This was however diluted by the upward movement in prices of bread and cereals, up 1,58%, coupled with a rise in the prices of meat which went up by 0,76%.
Inflation on housing, water, electricity, gas, and other fuels, which have a CPI weighting of 16,23%, rose 14,13% year-on-year and 1.26% month-on-month.
According to Zimstats, the CPI for the month of June rose to 101,84 compared to 101,63 in May this year and 97,95 in May 2011.
Using the current CPI determination method and with the rand continuing to weaken, inflation was likely to remain subdued and the weak global economic growth was likely to ensure that oil prices remained depressed in the short- to medium-term, resulting in weaker inflationary pressures in most oil-importing countries like Zimbabwe.
Government’s Medium Term Plan is targeting annual inflation to move within a band of 4% to 6% by 2015. It managed to meet the MTP inflation target last year, at 4,9% in December. The underperformance of the agricultural sector this year is expected to exert pressure on food inflation.
Overall inflation is thus projected at an average of 5% in 2012, according to Zimstats.
as CCZ says consumer basket has increased
CONSUMER Council of Zimbabwe (CCZ)’s consumer basket for a family of six marginally increased to US$561,13 in June, reflecting a 0,18% rise compared to the previous month. The consumer basket was recorded at US$560,14 in May.
According to CCZ, the food basket in the period increased by 0,92% to US$148,88, up from US$147,53 recorded the previous month.
The food and detergents basket went up 99 cents to US$162,13 in June compared to US$161,14 in May.
The CCZ said the rise in the basket was largely precipitated by the upward movement in price of sugar, which went up 10c to US$2,25; cooking oil, rose 16c to US$1,55 whilst tea leaves jumped by 46c to US$2,35 in the period.
Other increases were recorded in rice and tomatoes, going up by US5 cents, cabbage and bath soap increasing US9 cents and US2 cents respectively.
Despite the reduction in the prices of fuel, with petrol going down to US$1,39 a litre from $1,44 and diesel reducing to US$1,25 from US $1,33 in the period, there has been no significant corresponding reductions in prices of commodities.
Prices for mealie-meal marginally reduced to US$9,38 per 20kg, from US$9,90 in May while fresh milk went down 3US cents to 70US cents in the same period.
Onion prices reduced by a US cent to 99UScents per kg while washing soap shed off 9US cents to US$1,53 a bar in June.
The prices of margarine, bread, flour, salt, beef and washing powder remained unchanged.
The consumer basket for transport, rent, water and electricity, health, education, clothing and footwear also remained at US$399 in June.
CCZ however said it was concerned with the hike in transport fares during peak hours and will continue to monitor the situation closely and advocate for fair and affordable rates.
Water and electricity supply continue to be a challenge, with a number of households still running dry to the extent of using untreated water from unprotected wells and staying in darkness for periods beyond 12 hours, according to CCZ.
Commenting on the persistent shortage of coins for change, CCZ said it will continue engaging concerned stakeholders such as the Bankers Association of Zimbabwe and government, particularly the Ministry of Finance, until a solution to this crisis is found.