Continued slowdown in Zimbabwe monthly inflation

Published: 17 October 2019
Latest statistics from Zimstat show that country's monthly inflation rate was at 17.72% shedding 0.35 percentage points on the August rate of 18.07% as Government continues to target a monthly inflation rate of 10% by year end. However, the implied annual inflation drawn from the official statistics show a significant increase to 353% from the August figure of 288.5%.  
Annual inflation was at 5.39% in September last year and starting rising in October following the separation of nostro and RTGS accounts as prices started reflecting the exchange rate price indexation in an environment of high premiums in the parallel market.
Government projects that  as the country gets over the pass-through effects of the ongoing realignment of domestic prices that include, communications, fuel and electricity, inflationary pressures should begin to recede.
According to the Reserve Bank of Zimbabwe, inflation is expected to stabilize to lower levels, after the current cycle, which is largely influenced by the base effect and adverse expectations or low confidence levels, has passed. The confidence dividends from stable inflation and exchange rates will help anchor adverse inflation expectations.
"The major outstanding challenge in winning the inflation battle, is to ensure that funding for inescapable Government expenditures, such as grain imports, fuel and summer cropping working capital requirements, are contained within budget, so as to minimize recourse to potential inflationary Central Bank financing," said the RBZ.

The month on month Food and Non Alcoholic Beverages inflation rate stood at 19.55% in September 2019, gaining 1.00 percentage points on the August 2019 rate of 18.55%. The month on month non-food inflation rate stood at 16.63 percent, shedding 1.16 percentage points on the August 2019 rate of 17.79%.
According to the statistic agency, data on prices was collected during the period from 11 to 17 September 2019.  The highest inflation for the month was in prices related to car insurance and medical aid services, which rose by 138% and 96% during the month although contribution to weights is insignificant.
The CPI for the month ending September 2019 stood at 290.39 compared to 246.68 in August 2019.
- finx
Tags: Inflation,


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