Zimbabwe inflation hits two-year high but still negative

Zimbabwe inflation hits two-year high but still negative
Published: 16 February 2017 (960 Views)

Zimbabwe's inflation continued on its upward trend to reach its highest level in more than 24 months in January although is still negative according to data released yesterday by Zimstat, as consumers spent more for bread, cereal, fish, sea food, oils and fats and other products.

"The year-on-year inflation rate for the month of January 2017 stood at -0,65 percent, gaining 0,28 percentage points on the December 2016 rate of -0,93 percent", said the Agency.

Inflation last averaged -0,2 percent in 2014 and has been on an upward spiral since July 2016 when it recorded a relatively lower rate of -1,6 percent.

Prices of bread and cereals, which have a weight of 10,98 percent to the total consumer price index, surged by 1,86 percent. Fish and sea food prices also rose by 1,1 percent.

"The month-on-month inflation rate in January 2017 was 0,23 percent gaining 0,18 percentage points on the December 2016 rate of 0,06 percent", said Zimstat.

Costs of goods and services have also been rising over the past few months as a result of increased greenback shortages which forced some economic agents to resort to the black market where they pay a premium of up to 25 percent to get the erratic US dollars. The premium is then passed to the final consumer, which increases the general price level.

Gas prices however took a -9,17 percent dip, with actual rental for housing falling by -6,39 percent, while the prices of fruit also fell by -7,97 percent.

As the Government is targeting to increase aggregate production in the economy this year, driven by the 2017 National Budget theme - "Pushing production frontiers across all sectors of the economy" - it is important that more concrete supply side interventions be put in place to abet the operations of productive sectors.

The country's month-on-month food and non-alcoholic beverages inflation rate also significantly jumped up to 0,80 percent in January 2017, gaining by 0,42 percent on the December 2016 rate of 0,38 percent. - .

- Wires

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