'Zimbabwe inflation rate drops'

The country's inflation rate has dropped by over seven percent as government has been working tirelessly to contain price increases, Finance and Economic Development Minister Mthuli Ncube has said.

Ncube recently told members of Parliament that as of November (last month) the inflation rate was sitting at 9,2 percent, a 7,24 percent drop from October's recorded 16,44 percent.

"On inflation let me be clear. The monthly inflation figure for November is 9,2 percent. It dropped from 16,44 percent," he said.

The Finance minister said checking on inflation is important as not doing so affects all the programmes that government has planned as funds will become inadequate which will leave the poor and other vulnerable groups the worst affected.

He said government is working towards reducing inflation so as to preserve the values that were allocated.

Ncube added: "As I have said, the act of reducing the budget deficit and reducing the printing of money and excess liquidity in the system or economy goes a long way to dealing with inflation. So, all the fiscal discipline measures that we are putting in place are designed to deal with inflation among other things."

This comes after Zimbabwe National Statistical Agency (Zimstat) said Zimbabwe's year-on-year inflation rate for the month of November stood at 31,01 percent, gaining 10,16 percentage points on the October rate of 20,85 percent following a surge in prices of goods and services.

Ncube, however, said the 31 percent is a technicality otherwise inflation was at 9,2 percent as of November.

"I want to be clearer, the figure of 31 percent that is being used to make arguments is a technicality; it is index technicality because what you are doing is, you are comparing the level of index at the same time last year in November to the level of the index this year; from one year to the other year.

"That is exactly how you get to 31 percent. So at the end of the day you are moving from the index of a low base to the higher level of the index now but on a monthly basis inflation is falling. For the record the November figure is 9,2 percent," Ncube said.

Zimbabwe adopted the US dollar in February 2009 after dumping its hyperinflation-wrecked currency, which saw inflation fall to single digits.

Some businesses in Zimbabwe are now demanding US dollars only and have increased prices by more than three times for the majority who pay using bond notes.

Prices of basic goods also increased when the value of the bond note and electronic dollars collapsed on the parallel market, leading to panic buying by consumers for selected products.

The year-on-year food and non-alcoholic beverages inflation prone to transitory shocks stood at 42,71 percent whilst the non-food inflation rate was 25,40 percent