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Zimbabwe inflation rises again
15 Oct 2011 at 05:49hrs | Views
ZIMBABWE'S annual inflation rate has continued on an upward trend with the September rate gaining 0,8 percentage points to 4,3 percent due to a recent 31 percent increase in electricity tariffs, 'The Herald' reported.
This means that prices recorded an average increase of 4,3 percentage points between September 2010 and September 2011.
The surge in inflation poses serious threats to the projected year end target of 3,5 percent as pressure is coming from adjustments in the price of basic commodities.
Indications are that inflation is likely to end the year below 5 percent, assuming limited impact from exogenous shocks such as fuel prices and appreciation as well as containment of domestic costs particularly the wage bill.
The Zimbabwe National Statistics Agency on Friday said the month on month inflation rate for September was 0,8 percent gaining 0,7 percentage points on the August rate of 0,1 percent.
In August the annual inflation rate was on an upward trend after gaining 0,2 percentage points on the July rate of 3,3 percent.
Year on year food and non-food alcoholic beverages inflation stood at 4,01 percent while non-food inflation stood at 4,43 percent.
Food and non-alcoholic beverages inflation stood at 0,50 percent during the period under review gaining 0,52 percentage points on the August rate.
Analysts yesterday said inflationary pressures would continue towards the end of the year as retailers increase prices of basic commodities towards the festive season.
"Normally we get to see retailers and service providers increasing prices towards the festive season taking advantage of the 13th cheque.
"This is also coming on the back of the recent tariff review which has begun to stoke inflationary pressures on the local economy," said one analyst.
The current rate of inflation could also be a reaction to the re-introduction of duty on basic commodities.
After adopting the multiple currency system, Zimbabwe's inflation trends are also being affected by the exchange especially between the US dollar and the South African rand.
Zimbabwe imports about 80 percent of its goods from SA while the transacting currency is mainly the US dollar thus fluctuations of the US dollar have ripple effects on the rate of inflation.
Finance Minister Tendai Biti recently said the target was achievable as it was anchored on continued use of multiple currencies and increasing production of the industries.
Inflation opened the year at 3,5 percent, dropped in February by 3 percent and remained stagnant at 2,7 percent for the next two months before going down further to 2,5 percent in May.
However, it peaked marginally at 2,9 percent in June and this was in line with the Sadc and Comesa inflation target of single digit levels.
After peaking in June, the rate of inflation continued on an upward trend gaining 0,4 percentage points to 3,3 percent in July, 3,5 percent in August before jumping a significant 0,8-percentage point to 4,3 in September.
The marginal increase in June and July was related to price adjustments in rentals, medical products, domestic services and alcoholic beverages.
This means that prices recorded an average increase of 4,3 percentage points between September 2010 and September 2011.
The surge in inflation poses serious threats to the projected year end target of 3,5 percent as pressure is coming from adjustments in the price of basic commodities.
Indications are that inflation is likely to end the year below 5 percent, assuming limited impact from exogenous shocks such as fuel prices and appreciation as well as containment of domestic costs particularly the wage bill.
The Zimbabwe National Statistics Agency on Friday said the month on month inflation rate for September was 0,8 percent gaining 0,7 percentage points on the August rate of 0,1 percent.
In August the annual inflation rate was on an upward trend after gaining 0,2 percentage points on the July rate of 3,3 percent.
Year on year food and non-food alcoholic beverages inflation stood at 4,01 percent while non-food inflation stood at 4,43 percent.
Food and non-alcoholic beverages inflation stood at 0,50 percent during the period under review gaining 0,52 percentage points on the August rate.
Analysts yesterday said inflationary pressures would continue towards the end of the year as retailers increase prices of basic commodities towards the festive season.
"Normally we get to see retailers and service providers increasing prices towards the festive season taking advantage of the 13th cheque.
"This is also coming on the back of the recent tariff review which has begun to stoke inflationary pressures on the local economy," said one analyst.
The current rate of inflation could also be a reaction to the re-introduction of duty on basic commodities.
After adopting the multiple currency system, Zimbabwe's inflation trends are also being affected by the exchange especially between the US dollar and the South African rand.
Zimbabwe imports about 80 percent of its goods from SA while the transacting currency is mainly the US dollar thus fluctuations of the US dollar have ripple effects on the rate of inflation.
Finance Minister Tendai Biti recently said the target was achievable as it was anchored on continued use of multiple currencies and increasing production of the industries.
Inflation opened the year at 3,5 percent, dropped in February by 3 percent and remained stagnant at 2,7 percent for the next two months before going down further to 2,5 percent in May.
However, it peaked marginally at 2,9 percent in June and this was in line with the Sadc and Comesa inflation target of single digit levels.
After peaking in June, the rate of inflation continued on an upward trend gaining 0,4 percentage points to 3,3 percent in July, 3,5 percent in August before jumping a significant 0,8-percentage point to 4,3 in September.
The marginal increase in June and July was related to price adjustments in rentals, medical products, domestic services and alcoholic beverages.
Source - TH
