Zim remains in deflation

HARARE - Deflationary pressures in Zimbabwe continue to persist with the country’s annual inflation marginally shedding 0,03 percentage points to negative 2,22 percent in February from  negative 2,19 percent recorded in January 2016, official data shows.

Deflation is a decrease in the general price level of goods and services and it occurs when the inflation rate falls below zero percent (a negative inflation rate).

Latest figures from Zimbabwe Statistics Agency (Zimstat) show that the year-on-year food and non-alcoholic beverages inflation prone to transitory shocks stood at -4,04 percent while the non-food inflation rate was -1,35 percent during the month under review.

The Consumer Price Index (CPI) for the month ending February 2016 stood at 96,92 compared to 97,02 in January 2016 and 99,12 in February 2015.

“This means that prices as measured by the all items CPI decreased at an average rate of -0,10 percent from January 2016 to February 2016,” Zimstat said.

The month-on-month food and non-alcoholic beverages inflation rate stood at -0,03 percent in February 2016, shedding 0,16 percentage points on the January 2016 rate of 0,13 percent.

The month-on-month non-food inflation rate stood at -0,14 percent, shedding 0,01 percentage points on the January 2016 rate of -0,13 percent.

Zimbabwe was driven into deflationary territory in October 2014 and has remained there with year-on-year inflation for the month of January 2016 standing at -1,28 percent due to sluggish domestic demand and a weak rand.

Comments (1)

Government should stimulate aggregate demand by offering stimulus packages in Productive sectors, scrap taxes, offer grants, increase initial special allowance for new equipment and free training workshops for the productive industry. At the moment, the government has to work fiscal variables as Monetary variables are constant (we cannot print foreign currency)

Taco - 16 March 2016

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