Annual inflation slows to 4,3 percent

average of 4,3 percent between January 2011 and January 2012.
According to Zimbabwe National Statistics Agency, the year-on-year inflation rate for January 2012, as measured by the all-items CPI, stood at 4,3 percent, shedding 0,6 percentage points on the December 2011 rate of 4,9 percent.
The year-on-year food and non-alcoholic beverages inflation, prone to transitory shocks, stood at
4,90 percent while non-food inflation stood at 4,05 percent.
Zimbabwe has largely maintained a stable annual inflation rate, with December’s 4,9 percent rate being the highest since dollarisation of the economy in early 2009.
The latest decline means the annual inflation rate is still in line with the Government’s broad target of below 5 percent by the end of this year.
On a month-on-month basis, inflation quickened to 0,5 percent from 0,2 percent in December.
This means that the rate of change in prices as measured by the all-items CPI increased by an average of 0,5 percent from December 2011 to January 2012.
The monthly inflation rate has been driven by price increases in a number of basic commodities.
The Consumer Council of Zimbabwe recently noted that the recent spate in price increases was being driven by a weakening of the United States dollar against the South African rand.
The latest CCZ low income consumer basket for a family of six rose to US$576,69 for January from US$545,35 in the previous month.
“Retailers are quick to increase prices when the rand strengthens against the dollar and yet they ignore when it is the other way round,” lamented the CCZ.
According to Zimstats, the month-on-month food and non-alcoholic beverages inflation stood at 0,41 percent in January, gaining 0,08 percent on the December rate of 0,33 percent.
On the other hand, the month-on-month non-food inflation stood at 0,48 percent, gaining 0,33 percent on the December rate of 0,15 percent.
This shows that non-food items (especially rentals) were the major drivers of monthly inflation between December 2011 and January 2012.
The US dollar/South African rand exchange rate and South Africa’s rate of inflation are considered the key fundamentals anticipated to impact on the local rate of inflation in the outlook period.
Food security due to erratic rains had also been fingered as a factor this year. However, with the rains improving considerably in recent weeks, the impact of this factor may become negligible in the long run.