daniel chigunwe
Tapiwanashe Mangwiro
Senior Business Reporter
Zimbabwe has over the past five months managed to keep the monthly inflation rate below the target of 5 percent set by authorities in January this year for the period to December 31, 2023, after the November blended inflation rate came in at 4,5 percent.
The monthly inflation rate has stayed below the 5 percent target since spiking to 12,3 percent in June this year, which remains the highest blended monthly rate for the year. The rate is expected to close the year below the target given prices will likely fall due to the festive season shopping, which usually comes with discounts and promotions.
Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mangudya, in his mid-term monetary policy statement in August, said, “In the outlook, monthly inflation is expected to continue to decline with annual inflation expected to end the year between 60 percent and 70 percent.”
Economist Varaidzo Chagonda said the five consecutive months of the blended monthly inflation rate remaining below the 5 percent central bank target was a positive milestone.
“This consistent performance indicates a level of economic stability that bodes well for the outlook. It is an encouraging sign as we approach December, fostering confidence in the overall economic trajectory,” she opined.
Economic analyst Namatai Maeresera believes that the sustained period of inflation below the 5 percent target for five months is a promising indicator of economic resilience.
“As we head into December, this stability provides a positive foundation, reflecting a well-managed economic environment. It sets an optimistic tone for potential growth and prosperity in the coming month,” Mr Maeresera concluded.
The monthly blended rate increased from 2,5 percent in October to 4,5 percent this month.
According to the Zimbabwe Statistics Agency (ZimStat), the month-on-month inflation rate was 4,5 percent in November 2023, gaining 2 percentage points on the October 2023 rate of 2,5 percent, driven by the food and non-food items.
“The month-on-month food and non-alcoholic beverages inflation rate was 4,9 percent in November 2023, gaining 2,5 percentage points on the October 2023 rate of 2,4 percent. The November 2023 month-on-month non-food inflation rate was 4,4 percent, gaining 1,9 percentage points on the October 2023 rate of 2,5 percent.”
The year-on-year inflation rate for November 2023, as measured by the all-items Consumer Price Index (CPI), was 21,6 percent up from 17,8 recorded in October 2023. Economist Tinashe Majani said the increase reflected the effects of the electricity shortages in Zimbabwe, which have led to increased costs of energy as consumers use more expensive alternative sources of power like diesel and petrol.
“The parallel market rate surge from $7000 to $8 500 per US dollar in the month under review adds another layer of complexity to our inflation woes. It not only affects businesses dealing with foreign exchange but also impacts the purchasing power of ordinary citizens.”
Confederation of Consumer Rights chairperson, Dr James Chifamba pleaded with authorities to work on ways to find solutions for causes of inflation that are avoidable such as electricity shortages and exchange rate movements.
“The Confederation of Consumer Rights condemns the surge in health costs and telecom tariff hikes, directly impacting the average citizen. Our focus is on advocating for fair pricing and policies that safeguard consumers during these challenging economic times,” Dr Chifamba said.
“The..rise in monthly inflation from 2,4 percent to 4,5 percent in November is alarming. We urge policymakers to implement measures that address the root causes of inflation, providing relief to consumers grappling with the increasing cost of living.”
Online Reporter