An­nual in­fla­tion gains 0.18 per­cent­age points

Chronicle (Zimbabwe) - - Business Chronicle - Busi­ness Re­porter

ZIM­BABWE’S an­nual in­fla­tion gained 0.18 per­cent­age points to -1,43 per­cent in Au­gust from the July rate of -1,60 per­cent, data from the Zim­babwe Na­tional Sta­tis­tics Agency (Zim­stat) shows.

Zim­stat said on a monthly ba­sis, the in­fla­tion rate stood at -0.13 per­cent gain­ing 0.06 per­cent­age points on July rate of -0.19 per­cent.

“The year-on-year in­fla­tion rate for the month of Au­gust 2016 as mea­sured by the all items Con­sumer Price In­dex (CPI) stood at -1.43 per­cent, gain­ing 0.18 per­cent­age points on the July 2016 rate of -1.60 per­cent,” it said.

This means that prices as mea­sured by all the items CPI de­creased by an av­er­age of -1.43 per­cent­age points be­tween Au­gust 2015 and Au­gust 2016, said Zim­stat.

The year-on-year per­cent­age points gain on the rate of in­fla­tion is due to a slight in­crease in fuel price last month re­sult­ing in ba­sic com­modi­ties prices in­creas­ing.

Ac­cord­ing to the Con­sumer Coun­cil of Zim­babwe, the cost of liv­ing for low in­come ur­ban earner monthly bas­ket for a fam­ily of six in­creased from the July fig­ure of $567,91 to $571,14 in Au­gust 2016.

The food bas­ket in­creased by 1,73 per­cent from $122,60 by end of July 2016 to $124,72 last month.

The con­sumer watch­dog at­trib­uted the slight shift in prices to var­i­ous fac­tors in­clud­ing the cur­rent cash short­ages, the schools open­ing and fluc­tu­at­ing fuel prices.

Zim­babwe’s in­fla­tion has been in de­fla­tion since Fe­bru­ary 2015 due to per­sis­tent lim­ited con­sumer spend­ing.

De­fla­tion is when the econ­omy’s rate of in­fla­tion goes be­low zero. Econ­o­mists have how­ever, in­sisted that the pre­vail­ing neg­a­tive in­fla­tion was cor­rec­tional as it forced com­pa­nies to re-ad­just for goods and ser­vices that were set at a pre­mium when the coun­try adopted the multi-cur­rency sys­tem in Fe­bru­ary 2009.

Although the an­nual in­fla­tion slightly moved from de­fla­tion by 0,18 per­cent­age points last month, eco­nomic com­men­ta­tors have pro­jected that the de­fla­tion­ary en­vi­ron­ment would per­sist go­ing for­ward ow­ing to de­pressed de­mand.

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