Zimbabwe's March annual inflation rises to 673.39%

Published: 14 April 2020
Zimbabwe's annual inflation rose in March to 676.39% with expectations that it might touch the 1000% level within two months as supply chain disruptions and shortages are expected to lead to prolonged price increases due to the COVID-19 pandemic.
Data from Zimstat shows that the month on month inflation rate put on 13.07 percentage points to 26.59% from February's 13.52%. This means prices increased by an average of 26.59% in that month. The CPI moved to 810.40 from 104.38 recorded a year earlier. A month earlier, it stood at 640.16 after it added 170.24 points.

Monthly events show that the month on month inflation of 26.59% is in line with the average depreciation of the local currency on the interbank market mid-March when the Reuters System debuted before the managed peg exchange rate of 25. It is, however, lagging behind the 31.25% depreciation on the parallel market of 12.04% from 16 February - 16 March 2020.
If Zimstat is to be consistent with their data collection dates of between 12 and 17 of each month, April inflation will come in at higher levels as the local currency depreciated 17% early-April leaving ample time for price adjustments before data collection as well as the lockdown effect.
Zimbabwe has been battling to temper inflation in the midst of currency depreciation, a drought and as it faces a sharp economic contraction due to the impact of the novel coronavirus. Inflation is estimated to close the year around 50%. The central bank will need to control reserve money and money supply growth and more importantly have increased forex on the interbank market, which would help in having a uniform exchange rate and would remove all pricing distortions.
- finx
Tags: Inflation,


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