Domestic lending up 1.7%

THE Reserve Bank of Zimbabwe (RBZ) says domestic lending increased by 1,6 percent from May to June this year.

Although the central bank did not explain the reasons behind this development, it highlighted in its economic review for the period that annual non-food inflation had also increased.

“On a monthly basis, domestic credit increased by 1,6 percent, from $5 627.8 million in May 2016 to $5 719.6 million in June 2016,” said RBZ.

“During the period under review, year-on-year credit to the private sector declined by 4.5 percent to $3 571.6 million in June 2016, from $3 741.7 million in June 2015.”

Month-on-month credit to the private sector, said the central bank, decreased by 0,7 percent in June 2016.

RBZ also said annual non-food inflation stood at 0,1 percent in June 2016, up from 0,5 percent in May 2016.

“This was largely attributable to increases in education.

‘‘The cost of education has increased tremendously during the course of last year with university fees rising by 50 percent and other tuition fees by over 100 percent,” said RBZ.

“Even if the general price level is on a decline the hike in education fees affects households negatively.

“Month-on-month inflation stood at 0,19 percent in June 2016 representing a 0,4 percent increase from -0,24 percent registered in May 2016. The increase was largely attributable to gains in non-food inflation.”

RBZ said monthly non-food inflation had also increased from 0,12 percent recorded in May 2016, to 0,44 percent in June 2016.

This, according to the central bank, was underpinned by price increases in education, restaurants and hotels, health and alcoholic beverages.

Monthly food inflation also gained by 0,14 percent to close at 0,35 percent during the same period, said the central bank.

This was on account of increases in oils and fats, non-alcoholic beverages, and fish and sea food. — @BiancaMlilo