Annual inflation rate up 3,52 percent
ZIMBABWE’s annual rate of inflation gained 0,6 percentage points in December 2017 to 3,52 percent in January 2018, latest official data shows, partly driven by the 2018 back to school spending. The Zimbabwe National Statistical Agency (Zimstat) said this means prices, as measured by the all items consumer price index (CPI), increased by an average of 3,52 percent in the 12 months to January2018.
Chairperson of the University of Zimbabwe’s department of economics Professor Albert Makochekanwa said that the surge in inflation may have stemmed from increased spending ahead of the 2018 first term schools opening last month.
“I think the rise is attributable to shopping for the new school term; buying food and uniforms. Going forward inflation should remain stable because most people incomes are still subdued.
“People will be constrained and so I do not think that they will be too much buying,” Professor Makochekanwa said yesterday.
As Zimbabwe battled seemingly spates of prices increases last year, the International Monetary Fund projected the annual rate would hit 7 percent by December, 2017 and 9,5 percent end of 2018.
Despite a spate of price increases of some basic items, annual average inflation closed the year above 3 percent but below the Reserve Bank of Zimbabwe year end inflation cap of 3,7 percent.
“The year on year inflation rate for the month of January 2018 as measured by the all items Consumer Price Index (CPI) stood at 3,52percent, gaining 0,06 percentage points on the December 2017 rate of 3,46 percent,” Zimstat said in a report.
Zimbabwe has recently suffered from the impact of multi-tier pricing, currency premiums and speculative prices rises, which threatened to sustain pressure on inflation.
The year on year food and non-alcoholic beverages inflation prone to transitory shocks stood at 6,17 percent in January 2017 whilst the non-food inflation rate was 2,29 percent.
Zimstat reported that the month on month inflation rate in January 2018 was 0,30 percent after shedding 0,23 percentage points on the December 2017 rate of 0,53 percent.
This means that prices as measured by the all items CPI increased at an average rate of 0,30 percent from December 2017 to January 2018.
The month on month food and non alcoholic beverages inflation rate stood at 0,39 percent in January 2018, shedding 0,90 percentage points on the December 2017rate of 1,29 percent.
The month on month non-food inflation rate stood at 0,25 percent, shedding 0,09 percentage points on the December 2017 rate of 0,16 percent.
Zimbabwe’s CPI basket shows that about 70 percent of the CPI baskets are necessities such as food and non-alcoholic beverages, housing, water, electricity, gas and other fuels, health, transport and communication. Food and beverages constitute 33 percent of the CPI basket. Most items are produced locally or imported with priority allocations.
Prices for 495 products in the CPI are observed every month in all the districts throughout the country. About 35 000 individual price observations are made every month in all the districts for these 495 products.
The prices of these products have been fairly stable since 2012, if not declining, but seemed to rise wantonly between September 21 and 23, 2017.
The annual rate of inflation in Zimbabwe is currently below 10 percent threshold meaning that Zimbabwe is not in hyperinflation.