adminOliver Kazunga Business Reporter
ZIMBABWE’S year-on-year inflation for December 2013 declined to 0.33 percent shedding 0.21 percent on the November 2013 rate of 0.54 percent, the Zimbabwe National Statistics Agency (Zimstat) has said.
The agency said this means that prices as measured by the all items Consumer Price Index (CPI) increased by an average of 0.33 percentage points between December 2012 and December last year.
“The year-on-year food and non-alcoholic beverages inflation prone to transitory shocks stood at -2.20 percent whilst the non-food inflation rate was 1.61 percent.
“The month-on-month inflation rate in December 2013 was -0.08 percent shedding 0.17 percentage points on the November 2013 rate of 0.09 percent,” said Zimstat.
“This means that prices as measured by the all items CPI decreased at an average rate of -0.08 percent from November 2013 to December 2013.”
The month-on-month food and non-alcoholic beverages inflation stood at -0.41 percent last month, gaining 0.19 percentage points on the November 2013 rate of -0.60 percent.
The month-on-month non-food inflation stood at 0.08 percent, shedding 0.35 percentage points on the November 2013 rate of 0.43 percent.
An economic commentator Wendy Mpofu said fears were that the country was heading for deflation.
“From an economic point of view, fears are that the country is now heading for deflation which reflects bad signals to investors.
“If the country records deflation what it means is that there will be no economic activity; industries or companies will scale-down operations, for example they may start reducing working hours and subsequently close down operations because they do not have the capacity to produce,” she said.
Another economic commentator Chipo Warikandwa said: “The downward inflation trend the country is experiencing at the moment is something not to celebrate because it does not reflect the economic principles on the ground.
“We are heading for deflation where we say inflation has gone below zero with no economic activity and companies are bound to close down,” she said.
Another economic commentator Peter Mhaka said it was high time policy makers and other stakeholders found lasting solutions to the challenges facing the country.
Low capacity utilisation levels in the manufacturing sector due to liquidity challenges, power constraints and obsolete equipment are the major challenges that have plunged Zimbabwe’s economy into the doldrums.
Online Reporter