Year-on-year inflation drops

Published: 18 April 2018

ZIMBABWE'S year-on-year inflation rate for last month shed 0.30 percentage points on the February rate of 2.98 percent to 2.68 percent, official figures show.

The country's national statistics agency, Zimstat, said this means that prices as measured by the all items Consumer Price Index (CPI) increased by an average of 2.68 percent between March 2017 and March 2018.

"The year-on-year inflation rate (annual percentage change) for the month of March 2018 as measured by the all- items CPI stood at 2.68 percent, shedding 0.30 percentage points on the February 2018 rate of 2.98 percent," it said.

The year-on-year food and non alcoholic beverages inflation prone to transitory shocks stood at 4.54 percent while the non-food inflation rate was 1.81 percent.

Market analysts who preferred not to be named said yesterday that the reduction in inflation figures as pronounced by Zimstat could largely be attributed to situations where the market is negotiating for prices.

"For example, in the properties market, tenants are negotiating with landlords for rentals that they can afford. People are running away from expensive properties so sometimes they have leveraged to negotiate prices down," said one of the economic analysts.

Recently, the Government reduced excise duty on fuel, a move which had a knock-on effect on the pump price of fuel subsequently resulting in a reduction in the price of locally manufactured products.

Towards the end of last year, some unscrupulous businesspeople wantonly increased prices of goods and services on the back of misguided and irresponsible social media reports that the country was to have food shortages.

"Certainly, the intervention by Government to reduce excise duty on fuel like diesel is one area which we think has caused prices to come down. The other thing that has triggered prices to come down is the sales promotions presently being run by some large retail outlets," said Ms Wendy Mpofu.

In the 2018 monetary policy statement, Reserve Bank of Zimbabwe Governor Dr John Mangudya said in the outlook period, the risk of a rise in inflation would be mitigated by the positive domestic and international goodwill under the new economic and political dispensation.

"On the other hand, external factors such as the strengthening of the South African Rand; the US dollar, high demand for imported goods and services, and a surge in oil prices may continue to put pressure on domestic prices," he said.
- the herald

Tags: inflation,