Zimbabwe inflation drops to 269%

ZIMBABWE'S annual inflation rate dropped to 268,8% this month, as a series of novel measures including putting a stop to payments to most government contractors take effect.

According to latest data from the Zimbabwe National Statistics Agency (ZimStat), Zimbabwe's annual inflation now stands at 268,8%, down from 280,4% in the previous month.

Analysts said the drop was an important step in Zimbabwe's battle to stem a projected recession.

"The data indicates that the move to review payment to public contractors may be working," said Tapiwa Simba, head of strategy at Trade Winds.

"But government must balance between the tough measures and making sure consumers are not further hurt, having already been affected by two years of the global pandemic," Simba said, adding that the tough mop-up operation underway had suffocated markets.

Across global markets, governments have been raising rates to fight inflation, but Zimbabwe moved as step further to mop up liquidity.  

This marks the second time annual inflation has fallen since January this year when it fell to 60,61%, down from 60,74% in December 2021.

In August, annual inflation stood at 285,4%.

ZimStat said monthly inflation for October 2022 was 3,2%, shedding 0,3 percentage points on the September rate of 3,5%.

Inflation has been falling since August this year following tight monetary measures instituted by the government and monetary authorities.

Some of the measures included suspending payment to government contractors, raising the policy rate to 200% and introduction of gold coins as a store of value.

Stable inflation, according to central bank governor John Mangudya, was critical to sustained economic growth and value preservation.

The month-on-month food and non-alcoholic beverages inflation rate stood at 3,1% in the period under review, gaining 1,4 percentage points on the previous month. The month-on-month non-food inflation rate stood at 3,2%, shedding 2,0 percentage points on the previous month.