Zimbabwe deflationary pressures persist

Published: 21 June 2015
Deflationary pressures in Zimbabwe continue to persist with the country's annual inflation shedding 1,45 percentage points to -2,65 percent in April form -1,20 percent recorded in March.

Latest figures from Zimstat show that the year on year food and non-alcoholic beverages inflation prone to transitory shocks stood at -2,93 percent whilst the non-food inflation rate was -2,51 percent.

The Consumer Price Index (CPI) for the month ending April 2015 stood at 98,22 compared to 99,09 in March 2015 and 100,89 in April 2014.

"CPI decreased at an average rate of -0,89 percent from March 2015 to April 2015…the month on month food and non-alcoholic beverages inflation rate stood at -0,63 percent in April 2015, shedding -0,59 percentage points on the March 2015 rate of -0,03 percent," Zimstat said.

The month on month non-food inflation rate stood at -1,01 per-cent, shedding -0,99 percentage points on the March 2015 rate of -0,03 percent.

In March, the country's annual inflation for gained 0,19 percentage points while Zimbabwe remained in negative inflation at -1,20 percent.

According to the Zimstat, prices as measured by the all items CPI decreased by an average of 1,20 percent between March 2014 and March 2015.

Prices decelerated by around one percent last year, and market watchers project that inflation is going to be at least minus seven percent on the condition the South African rand gets to 13-14.

Disposable incomes have hit consumers, thus the softening prices have done nothing for the consumers.

"Contrary to Central Bank views that this is positive for the economy as it is price correction, the situation has only made life worse for consumers, so government must gear up for deflation in the very near future," a Harare-based analyst said.

Meanwhile, an equities report said deflationary pressures in the country have down played the outlook for most listed companies on the Zimbabwe Stock Exchange, as margins are under pressure while demand continues to wan.
- dailynews
Tags: Deflation,

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