Price in­creases push in­fla­tion up

Chronicle (Zimbabwe) - - Business Chronicle -

ZIM­BABWE’s an­nual in­fla­tion for Oc­to­ber gained 0.37 per­cent­age points to close the month at -0.95 per­cent from -1.33 per­cent in Septem­ber as prices of some ba­sic com­modi­ties started creep­ing up.

Early this month listed com­pa­nies such as Econet Wire­less and re­tailer OK Zim­babwe, com­plained over de­lays in mak­ing for­eign pay­ments to ex­ter­nal sup­pli­ers on the back of cash short­ages.

This sit­u­a­tion, cou­pled with im­port re­stric­tions, started to im­pact the sup­ply of prod­ucts and re­sulted in some price for com­modi­ties such as cook­ing oil in­creas­ing.

Latest fig­ures from the Zim­babwe Na­tional Statis­tics Agency (Zim­stat) show gains were pushed by an in­crease in prices of food and non­al­co­holic bev­er­ages as most prices started creep­ing up.

Zim­stat said price hikes were also a re­sult of re­tail­ers tak­ing ad­van­tage of “forced con­sumer pur­chases in re­turn for cash­back fa­cil­i­ties” as well as a rise in fur­ni­ture and house­hold equip­ment prices.

“Year-on-year food and non-al­co­holic bev­er­ages in­fla­tion prone to tran­si­tory shocks stood at -2.03 per­cent while the non-food in­fla­tion rate was -0.45 per­cent,” it said.

An­nual in­fla­tion stood at -2.19 per­cent in Jan­uary but is ex­pected to close December in the pos­i­tive, spurred by re­cent price in­creases fol­low­ing the re­moval of cer­tain goods on open gen­eral im­port and the up­ward pres­sure on food items due to a poor har­vest as a re­sult of drought.

Month-on-month food and non-al­co­holic bev­er­ages in­fla­tion rate stood at 0.40 per­cent in Oc­to­ber 2016, gain­ing 0.46 per­cent­age points on Septem­ber’s -0.06 per­cent.

On the other hand, month-on-month non-food in­fla­tion rate stood at -0.05 per­cent gain­ing 0.29 per­cent­age points on the Septem­ber 2016 rate of -0.34 per­cent.

The con­sumer price in­dex for the month end­ing Oc­to­ber 2016 stood at 96.10, com­pared to 96.01 in Septem­ber 2016 and 97.02 in Oc­to­ber 2015.

Pre­lim­i­nary growth pro­jec­tions for 2017 have been pegged at 4,8 per­cent.

Trea­sury says the 2017 growth pro­jec­tion is an­chored on the fol­low­ing as­sump­tions: nor­mal to above nor­mal rain­fall pat­tern sup­port­ing a favourable agri­cul­tural sea­son; im­proved agri­cul­tural fi­nanc­ing; in­cen­tives for ex­porters; mod­er­ate im­prove­ment in in­ter­na­tional com­mod­ity prices as well as an im­proved in­vest­ment en­vi­ron­ment ben­e­fit­ing from the on­go­ing Ease of Do­ing Busi­ness Re­forms.

Also seen as con­tribut­ing to the growth was the suc­cess­ful re-en­gage­ment with In­ter­na­tional Fi­nan­cial In­sti­tu­tions (IFIs) and pos­i­tive gains from the var­i­ous fa­cil­i­ties for the pro­duc­tive sec­tors sup­ported by im­ple­men­ta­tion of SI 64 of 2016, which seeks to pro­vide an even play­ing field for in­dus­tries from un­fair com­pe­ti­tion posed by some im­ports. — Wires/Busi­ness Reporter

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