Home » General » ZIMBABWE’S INFLATION RATE AT – 0.08 PCT IN JUNE

HARARE, July 15 — Zimbabwe’s state of deflation has slowed down with the annual inflation rising to minus 0.08 per cent in June after gaining 0.11 percentage points on the May rate of minus 0.19 per cent, according to the latest data released figures released by the Zimbabwe National Statistics Agency (Zimstat).

Zimbabwe slid into deflation in February on the back of low activity in the economy and shrinking consumption on the part of hard pressed consumers. The economy is battling a serious liquidity crunch fuelled by a drought in fresh capital injections and foreign direct investment (FDI).

Figures released by Zimstat here Monday show that price movements in the food, non-alcoholic beverages, clothing and footwear accounted for the gains.

“The year-on-year inflation rate for the month of June 2014 as measured by the all-item Consumer Price Index stood at – 0.08 per cent, gaining 0.11 percentage points on the May rate of – 0.19 per cent,” Zimstat said.

Month-on-month inflation stood at – 0.03 per cent in June from – 0.13 per cent in May.

The latest figures come on the heels of a prediction by the International Monetary Fund (IMF) that Zimbabwe was likely to come out of deflation by the year-end.

This would happen on condition that government comes up with structural reforms to improve the business environment and stimulate production, the IMF said.

“Deflation could also correct the existing overvaluation in the real exchange rate, although that would require prices of non-traded inputs, notably labour and final goods to fall faster than the prices of traded
goods, which has not been the case so far,” the IMF added.

SOURCE: NEW ZIANA

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