Inflation declines further

HARARE - Zimbabwe's annual inflation rate decreased by 0,12 percentage-points on the January rate of -1,28 percent to -1,40 percent in February, the Zimbabwe National Statistics Agency (Zimstats) said on Friday.

This means that prices as measured by the all items CPI decreased by an average of 1,40 percentage-points between February 2014 and February 2015.

“The year on year food and non-alcoholic beverages inflation prone to transitory shocks stood at -2.87 percent whilst the non-food inflation rate was -0,68 percent,” said Zimstats.

On the other hand, the month on month inflation rate in February 2015 was -0,07 percent gaining 0,27 percentage points on the January 2015 rate of -0,34 percent

In February, central bank governor John Mangudya said the continued decline in the inflation rate was a necessary step towards price correction.

“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. It is disinflation and not deflation,” he said in the monetary policy statement.

“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.”


Comments (3)

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There you go the spin doctors at it again disinflation as opposed to deflation, what a phenomenon. The facts are people's incomes are dwindling as companies and factories closes, the government is broke and cannot stimulate economy growth through various projects that keeps people employed, the foreign investors are sitting by the fence trying to read the politics of the country. The bottom line is the people's incomes are falling, aggregate demand for goods and services is falling and therefore the economy is re-pricing , that's deflation to me. There is nothing good about this.

Upfumi - 19 March 2015

Disinflation is commonly used by the Federal Reserve in USA to describe situations of slowing inflation. Instances of disinflation are not uncommon and are viewed as normal during healthy economic times. Although sometimes confused with deflation, disinflation is not considered to be as problematic because prices do not actually drop and disinflation does not usually signal the onset of a slowing economy. This is not the case in Zimbabwe. The economy has drastically slowed down because of high unemployment rate of over 90%, broke government who cannot pay their own workers, and no new capital investment or infrastructure investment. These are all signs of a sick slowing economy. Therefore Zim Reserve Bank Governor is lying and just being a bafoon. A form one Economics student is a better analyst than this bafoon

Zim Future - 19 March 2015

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