Zimbabwe annualised inflation ease, says ZimStat

Zimbabwe's annual inflation for the month of May shed 0.05 percentage points to -2.70 percent from -2.65 percent recorded in April 2015, ZimStat has said.

On a monthly basis, inflation stood at -0.19 percent gaining 0.70 percentage points -0.89 percent in May.

Zimbabwe's inflation once regarded as the highest in the world during the country's economic meltdown that came to an end in 2009, has continued to trend downwards.

The sustained drop indicates weak consumer demand against a backdrop of tight liquidity conditions coupled with benefits accrued from the fall of the South African Rand against the United States dollar. Prices remain subdued on the back of weakness in the labour market due to relatively stagnant salaries as well as the lack of credit will continue to act as a headwind to discretionary consumer spending.

Low and declining inflation, whilst indicative of price stability, could be also an indicator of subdued economic activity. The liquidity situation in the country remains constrained, as a result there is weak aggregate demand for goods and services.