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Year-on-year inflation remains constant at 2.71%

by Staff reporter
19 Jun 2018 at 07:04hrs | Views
ZIMBABWE's year-on-year inflation remained constant at 2,71 percent in May, official data from the Zimbabwe National Statistics Agency (Zimstat) shows.

The month-on-month inflation rate was at 0,05 percent, shedding 0,03 percentage points on the April 2018 rate of 0,08 percent.

"The year-on-year inflation rate for the month of May 2018 as measured by the all items Consumer Price Index (CPI) stood at 2,71percent, remaining constant on the April 2018 rate of 2,71 percent.

"This means that prices as measured by the all items CPI increased by an average of 2,71 percent between May 2017 and May 2018," it said.

Zimstat indicated that the year-on-year food and non alcoholic beverages inflation prone to transitory shocks stood at 4,89 percent while the non-food inflation rate was 1,69 percent.

The month on month non-food inflation rate stood at 0,03 percent, shedding 0,08 percentage points on the April 2018 rate of 0,11percent. Economic analysts have attributed the consistency in the rate of inflation last month to the worsening cash crisis. Economic analyst Ms Wendy Mpofu noted that inflation was largely driven by changes in the prices of goods and services.

"Consumer demand is at the moment subdued because people have no disposable income to spend and should consumers have more money to spend, prices are bound to increase," she said.

Ms Mpofu said in light of the prevailing cash crisis, consumers were prioritising what they buy adding that going forward into the year particularly towards year-end, inflation would rise sharply due to the festive season as people have a tendency of spending during that period.

Another economist, Mr Peter Mhaka said: "Businesses will also raise prices of goods and services going towards the end of the year as they seek to capitalise on the upsurge in consumer demand caused by the festive season. In April, the rate of inflation remained flat due to the persistent cash crisis."

In the 2018 monetary policy statement, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya indicated that in the outlook period, the risk of inflation would be mitigated by the positive domestic and international goodwill following the new economic and political order existing in the country.

"On the other hand, external factors such as further strengthening of the South African rand; the US dollar; high demand for imported goods and services; and surge in oil prices, may continue to put pressure on domestic prices.

"The Bank will, therefore continue to closely monitor price movements, and take pre-emptive and corrective measures to contain inflation to the Sadc target of between three and seven percent by year – end," he said.

Source - chronicle