Inflation tumbles to 3,5 percent

The Chronicle

Michael Makuza, Business Reporter
ZIMBABWE’S month-on-month inflation rate has drastically dropped to 3,5 percent in September, shedding 8,9 percentage points on the August rate of 12,4 percent as price stability persists across the market in response to Government measures.

Annual inflation has similarly eased to 280,4 percent during the same period compared to 285,0 percent last year.
Economic observers have hailed the recent stability in prices of basic goods and services, which have seen some commodities such as fuel and cooking oil continuing to fall following adoption of corrective measures by the Government and the Reserve Bank of Zimbabwe (RBZ).

In view of the drop in the fuel price, which is a major cost driver, more businesses have been urged to reduce prices.
The comprehensive fiscal and monetary measures have hit the black-market exchange rate in a big way by drying up excess liquidity and market indiscipline which drove wild inflationary pressures.

According to the Zimbabwe National Statistics Agency (ZimSat)’s latest update, the country is making inroads in stemming the recent inflation spiral, with the prevailing stability expected to restore consumer spending power.

“The month-on-month inflation rate in September 2022 was 3,5 percent shedding 8,9 percentage points on the August 2022 rate of 12,4 percent,” said the agency.

“This means that prices as measured by the all-items CPI increased by an average rate of 3,5 percent from August 2022 to September 2022.”

ZimStat also said the month-on-month food and non-alcoholic beverages inflation rate stood at 1,7 percent in September 2022, shedding 12,5 percentage points on the August 2022 rate of 14,2 percent.

“The month-on-month non-food inflation rate stood at 5,2 percent, shedding 5,4 percentage points on the August 2022 rate of 10,6 percent,” it said.

The positive macro-economic developments have seen some suppliers now issuing credit notes to retailers so they can reduce their prices earlier than expected with more traders now seeking for more local currency as opposed to the hard currency.

In July the Reserve Bank of Zimbabwe introduced gold coins whose tremendous appetite has helped mop up excess liquidity by offering those with large sums of cash in bank accounts a better means of preserving value instead of offloading their funds to the black market to buy foreign currency.

The exchange rate on the black market has now been stable at around US$750 to $800 per US-dollar and even edging down, closing the gap with the official rate at around $613,4 per dollar.

The statistics agency also said Consumer Price Index (CPI) for the month ending September 2022 stood at 12 713,12 compared to 12 286,26 in August 2022 and 3 342,02 in September 2021.

Meanwhile, the year-on-year inflation rate (annual percentage change) for the month of September 2022 as measured by the all-items Consumer Price Index (CPI) stood at 280,4 percent compared to 285,0 percent.

“This means that prices as measured by the all-items CPI increased by an average of 280,4 percent between September 2021 and September 2022,” said the agency.

“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.”

Article Source: The Chronicle

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