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Business Reporter
ZIMBABWE’S annual rate of inflation shed 0,05 percentage points on the April figure to minus 2,70 percent in May, as a weaker rand, more competition and tighter manufacturing management maintain pressure on prices.
According to Zimbabwe National Statistics Agency prices decreased by an average of 2,70 percent between May 2014 and May 2015.
Zimbabwe uses a basket of currencies dominated by the US dollar, and the falling value of the Rand and some other currencies continues to make imports, especially from South Africa, cheaper for local retailers.
On average, Zimbabwe imports about 60 percent of basic products consumed in the country from South Africa.
The month-on-month rate of inflation in May 2015 came in at minus 0,19 percent gaining 0,70 percentage points on the April 2015 inflation rate of minus 0,89 percent.
Monthly inflation has in recent months kept a downward trend as manufacturers and retailers, are able to lower prices, including Innscor, Delta, Econet and Dairibord, to boost demand. The falling value of the rand has also made imports from South Africa cheaper in US dollar terms and the competition now in place forces retailers to pass the lower prices onto consumers.
Price reductions have been noted in such fast moving consumer goods as airtime, bread and beer.
It is now apparent that price adjustment is being driven by price re-alignment and not deflationary crisis. Better management and technology by successful manufacturers have lowered many prices.
It has long been argued that high prices in Zimbabwe under the strong US dollar would not be sustained for long in a country that has the freedom to import cheaper from the region.
According to the national statistical office, the year-on-year food and non-alcoholic beverages stood at minus 3,0 percent while the non-food inflation rate was minus 2,56 percent.
Online Reporter