INFLATION QUICKENS TO 5,39PC:
ZIMBABWE’S annual inflation rose to 5,39 percent in September from 4,83 percent the previous month on the back of a sustained increase in price of goods and services, official data released by Zimstats show.
However, measures recently put in place by Government, are expected to ease pressure on prices moving forward and arrest inflation’s upward trend.
Inflation is the rate at which the general level of prices for goods and services is rising over a period of time be it annual or month-on-month.
Inflation in the 12 months through September rose 5,39 percent gaining 0,56 percentage points on the August 2018 rate of 4,83 percent, Zimstats reveal.
The month-on-month inflation rate in September 2018 was 0,92 percent gaining 0,53 percentage points on the August 2018 rate of 0,39 percent. This means that prices as measured by the all items CPI increased by an average rate of 0,92 percent from August 2018 to September 2018.
This upward trend, which has continued since May, is largely expected with the Reserve Bank of Zimbabwe in its 2018 mid-term Monetary Policy Statement (2018 MPS) having said; “The continued shortages of foreign exchange in the economy, has continued to exert pressure on the foreign currency market, leading to parallel market activities, which have pass–through effects on prices.”
The year-on-year food and non- alcoholic beverages inflation rate for September 2018 stood at 7,94 percent compared with 7,52 percent in September 2017. The month-on-month food and non-alcoholic beverages inflation rate stood at 1,05 percent in September 2018, gaining 0,43 percentage points on the August 2018 rate of 0,62 percent.
A general price increase was recorded for all food categories in September 2018, with the largest contribution observed for meat, bread and cereals. Increases in the bread and cereals could be attributed to the shortage of foreign currency, which saw millers struggling to pay for imports and resorting to prices increases.
Non-food inflation also increased across many sub-categories, with the largest increases recorded for clothing, footwear, gas, and health.
The year-on-year food and non-alcoholic beverages inflation rate for September 2018 stood at 4,20 percent compared with 3,58 percent in September 2017. The overall inflation out turn is, however, within manageable levels and in line with what prevails in the Sadc region.
Despite the increase in the annual inflation rate to 5,39 percent in September 2018, the country’s inflation remains within the Sadc health inflation benchmark of below 7 percent, required for macroeconomic convergence. The central bank, expects inflation to remain below 7 percent by the close of the 2018 calendar year.
In its MPS, the central bank said; “Measures being taken by Government to reduce fiscal imbalances which are exerting pressure on both the financial sector and foreign currency market are expected to bear fruit in reducing or tapering aggregate demand which is the main source of consumer spending.
This together with renewed market confidence and continuous concerted efforts by the Bank to secure lines of credit to supplement foreign receipts from exports and diaspora remittances, are expected to rebalance the economy and contain inflation with the regional acceptable range, said the RBZ.