Zimbabwe inflation decreases

THE country’s year-on-year inflation shed 0.17 percentage points to 0.14 percent in July, figures from the Zimbabwe National Statistics Agency (Zimstat) show.

Month-on-month inflation also fell from -0.36 percent to -0.24 percent in June.

‘The year-on-year inflation rate for the month of July 2017 as measured by the all items Consumer Price Index (CPI) stood at 0.14 percent, shedding 0.17 percentage points on the June 2017 rate of 0.31 percent. This means that prices as measured by the all items CPI increased by an average 0.14 percentage points between July 2016 and July 2017,” said Zimstat.

It said the month-on-month inflation rate in July 2017 was -0.36 percent shedding 0.12 percentage points on the June 2017 rate of -0.24 percent.

This means that prices decreased at an average rate of -0.36 percent from June 2017 to July 2017.

In the 2017 mid-term monetary policy statement, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said on the outlook, inflation would be influenced largely by domestic fiscal developments, foreign exchange availability, international oil prices and the United States dollar or South African rand exchange.

“Overall, inflation is expected to remain in the positive territory in 2017, with annual average inflation projected at between two percent and three percent, which is in line with Sadc inflation benchmark of between three percent and seven percent.

The bank shall continue to monitor and manage downside risks to inflation emanating from domestic factors particularly the pass-through effect of a fiscal induced foreign currency shortages on premiums and multiple pricing practices in the domestic economy,” he said.

The year-on-year food inflation accelerated sharply from -0.30 percent in January 2017, to 1.92 percent in May 2017.

The surge in food inflation was attributable to intermittent food shortages before the harvesting period, which began in April 2017, as well as to production constraints in the food manufacturing industry.

Dr Mangudya said the annual food inflation, however, decelerated from 1.92 percent in May 2017 to 1.82 percent in June 2017, reflecting the increased output of grains.

“The 2016/17 bumper harvest is expected to dampen food prices. On account of the good agriculture season, significant price declines were recorded for bread and cereals, meat, fruit, vegetables, oils and fats, and milk, cheeses and eggs in June 2017,” he said.

Annual non-food inflation moved into positive territory, increasing from -0.82 percent in January 2017 to 0.08 percent in April 2017, before peaking at 0.21 percent in May 2017.

The increase was driven by the firming of the South African rand and international oil prices.

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