Family basket now 5,5pc cheaper

Ivan Zhakata-Herald Correspondent

THE stability of the local currency has led to a decrease in the cost of the family food basket by 5,5 percent to $2 539 494,10 as prices of basic commodities and costs of basic services continue to fall, Consumer Council of Zimbabwe executive director, Mrs Rosemary Mpofu, has said.

The basket is a set of food and other consumables, plus services such as electricity, that an average family needs to buy to maintain a reasonable standard of living but with no luxuries or extravagance.

There was a major fall in the cost of living last month with the month-on-month inflation at minus 6,5 percent following the minus 15 percent in July, with that big fall largely driven by a fall of more than 30 percent in the prices of food and non-alcoholic drinks, although prices of most other goods remained the same between June and July.

Mrs Mpofu said a decrease in the family basket was largely caused by the appreciation of the Zimbabwe dollar causing prices of basic commodities in the food basket to fall.

“The cost of living as measured by the Consumer Council of Zimbabwe’s low income urban earner monthly basket for a family of 6 decreased by 5,5 percent from $2 687 018 to $2 539 494,10,” she said.

“Clothing and footwear, health services, flour and education were the main drivers to the basket for the month of August 2023. Electricity, unlike in the past month contributed negatively to the basket falling by 22.9 percent and this is largely attributed to the appreciation of local currency which most consumers use when paying for electricity.”

Mrs Mpofu said prices of most basic products in the family basket went down and this was attributed to the strengthening and stability of the local currency which actually maintained during the month of August 2023.

“Previously, some business operators were indexing their prices to the informal exchange rate using speculative pricing and forward pricing to hedge against inflation and this pricing behaviour was not rampant during the month of August 2023 indicating the same level of conformity in the market. A 2kg packet of sugar and 20kg of mealie meal we once in short supply but however this only occurred for some few days and now the products are readily available in the market,” she said.

“CCZ is still noting and is concerned that some supermarkets who are still pricing their products at rates above the stipulated rate from the monetary authority are bringing us back. In United States dollar terms, however, the basket actually shows that there is a reduction by 9,2 percent from US$540,76 to US$490,88 during the same period.”