Inflation slows down to 16.55%

TINASHE MAKICHI

Zimbabwe’s month on month inflation rate fell to 16.55% in December 2019 from 17.46% in November, official data from the Zimbabwe National Statistics Agency (Zimstat) released yesterday showed.

Zimstat was directed by Finance Minister Mthuli Ncube to stop publishing year on year inflation rate in July last year after it reached 176%.

But, independent economists continue calculating annual inflation rate.

The rate is estimated to be hovering around 500%.

Zimstat continues to calculate the month-on-month inflation rate, which is given by the percentage change in the index of the relevant month of the current year compared with the index of the previous month in the current year.

According to the latest statistics from Zimstat, the Consumer Price Index (CPI) during the month under review reached 551.63 compared to 473.28 in November.

It clocked 16 months on an upward trajectory.

“The reduction on month on month inflation is just an indication of the decrease in the rate of increase in prices, occasioned largely by the exchange rate stability achieved over the review period,” economist Persistence Gwanyanya told Business Times.

Gwanyanya added: “We have experienced some measure of stability on the exchange rate from over the last three months, attributable to RBZ intervention to deal with accounts suspected to be driving the parallel market.”

Economic analyst Richard Mawarire told Business Times that inflation has not been going down but increasing instead, though at a slow pace.

“The inflation situation is actually that it’s going up, but there has been a general slowdown at the rate at which it has been going up,” Mawarire said.

Zimstat data also show that mean month on month rate of inflation for the period January to December 2019 was 17% while the mean for the same period in 2018 was 3.1%.

Month-on-month food and non alcoholic beverages inflation rate in December stood at 15.75%, shedding 6.88% points from 22.63% reported in November 2019.

Monthon-month non-food inflation rate stood at 17.14%, gaining 3.20% points on the November 2019 rate of 13.94%.

Since March 2019, Zimstats introduced new CPI with new weights and a classification.

The use of a Classification of Individual Consumption by Purpose (COICOP) resulted in the creation of a new classification which resulted in coming up with 83 classes, 41 groups and 12 divisions.

The implementation of the COICOP classification was in sync with what was happening elsewhere in the Sadc region.

Zimstats said all member states were supposed to adopt the new procedure to enable inter country comparisons of the CPI and the rate of inflation.

The new weights were therefore applicable from February 2019 onwards.

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