Zim inflation rate remains in the negative

HARARE - Zimbabwe's year-on-year inflation rate receded to -1, 28 percent in January 2015 after shedding 0, 48 percentage points on December 2014’s - 0, 80 percent.

The Zimbabwe National Statistics Agency (Zimstats) on Monday said prices, as measured by the all items Consumer Price Index, decreased by an average 1,28 percentage points between January 2014 and January this year.

This comes as Reserve Bank of Zimbabwe (RBZ) governor John Mangudya predicted that inflation would remain in the negative territory for the greater part of 2015 mainly due to effects of depressed international oil and food prices.

Mangudya, however, said the country is not in deflation but is just experiencing “a disinflationary period.”

“The Reserve Bank’s considered view is that the reduction in the rate of inflation in the national economy was and is a necessary process towards correcting the high prices obtaining in the country,” he said.

The central bank chief noted that the disinflation in Zimbabwe is, therefore, a good development as it increases the consumers’ purchasing power.

“Disinflation is different from a deflation phenomenon which is caused by businesses lowering prices in a desperate attempt to get consumers to buy their products,” Mangudya said.

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