Inflation declines marginally

the month of May 2012 as measured by the All Items Consumer Price Index stood at 4,02 percent, shedding 0,01 percentage points on the April 2012 rate of 4,03 percent,” said Zimstats.
This means that prices as measured by the All Items CPI increased by an average of 4,02 percentage points between May last year and May 2012.
A CPI index reflects changes in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly.
The figures given by the CPI in addition to the current headline consumer inflation rate give an indication that prices have been generally stable during the period under review.
However, there is a general feeling amongst the public that the prices of key basic commodities are rather steep and have been on an incremental trend.
Analysts warn that caution should be exercised when interpreting inflation statistics.
“A decline in the annual rate of inflation does not mean that general prices of goods are falling.
“Instead, it means that while the general price of goods is still increasing, the rate of price increase has slowed down.
“Nonetheless, three years ago when the country abandoned the Zimbabwean dollar after a prolonged period of hyperinflation, the CPI was pegged at 100. This rebased CPI of 100 was reflecting the prices of goods that were prevailing at the time of dollarisation,” said a local economist.
He added that: “The May 2012 CPI is now 101,6 implying that compared to prices at the inception of multi-currency, the general prices have increased by 1,6 percent.
“However, the prices of goods at the inception of multi-currency were relatively high as these prices were partly a reflection of insufficient availability of goods in the market as well as lack of understanding of the true value of the United States dollar at this time.
“The decline in inflation in 2009 was partly a correction of this anomaly and a sign of improved availability of basic goods. Therefore, although the current inflation of 4 percent seems to be relatively low, the price level of general goods could be much higher,” ZimStats figures show that on a month-on-month basis, inflation was at 0,07 percent in May compared with April’s 0,19 percent.
The year-on-year food and non-alcoholic beverages inflation prone to transitory shocks stood at 4,61 percent, while non-food inflation stood at 3,75 percent.
The month-on-month inflation rate in May 2012 was 0,07 shedding 0,12 percentage points on the April 2012 rate of 0,19 percent, which means that prices as measured CPI increased at an average of 0,07 percent from April 2012 to May 2012.
The month-on-month food and non-alcoholic beverages inflation stood at -0,25 percent in May 2012 shedding 0,39 percentage points on the April 2012 rate of 0,14 percent.
The month-on-month non-food inflation stood at 0,21 percent, remaining unchanged on the April 2012 rate of 0,21 percent.
The CPI for the month ending May 2012 stood at 101,63 compared to 101,56 in April 2012 and 97,71 in May 2011.