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Zimbabwe inflation continue to rise

by Ndou Paul
13 Apr 2017 at 15:22hrs | Views

Zimbabwe's year on year inflation rate continued to rise in March and stood at 0.21% after gaining 0.15% on the February rate, latest data has shown.

Zimbabwe slipped out of deflation in February after year-on-year inflation for that month stood at 0,06%, after gaining 0,71% on the January rate. In January, year-on-year inflation was -0,65%.

"The month on month inflation rate in March 2017 was 0.03% shedding 0.58% on the February 2017 rate of 0.61%," said Zimstat.

"This means that prices as measured by the all items CPI [consumer price index] increased by an average of 0,15% points between March 2016 and March 2017," the Zimbabwe National Statistics Agency said in data released today.

"The year-on-year inflation rate is given by the percentage change in the index of the relevant month of the current year compared with the index of the same month in the previous year," ZimStat said.

Zimbabwe slipped into deflation in September 2014 when the inflation rate went below zero.

Analysts also say inflationary pressures will continue to increase as Government is constantly running a budget deficit and hiding inflation in the Treasury Bills that have been issued unsustainably.

In his 2017 Monetary Policy Statement, central bank governor John Mangudya said inflation was expected to move into positive territory in 2017 for the first time since September 2014, on the back of anticipated increase in international oil prices and domestic sector recovery.

"There are strong indications that oil supply will fall on the global market, following the agreement by oil producing nations to cut production in 2017," he said then.

"This positive trajectory is expected to be reinforced by the general recovery of the economy in 2017 on account of the expected strong agricultural outturn, which is going to increase disposable income."

Mangudya said the bank was projecting inflation of around 1% to 2% in 2017.

Zimbabwe's annual inflation rate averaged 0.86% from 2009 until 2017, reaching an all-time high of 5.30% in May of 2010 and a record low of -7.50% in December of 2009.

Zimbabwe's controversial bond notes are seen driving inflation into the future and have already been blamed for rising inflationary pressures at the end of 2016.

The central bank introduced bond notes late last year, which it claimed was backed by a US$200 million Afreximbank facility, to ease the cash crisis that started ahead of the 2015 festive season.

Source - Byo24News