adminFinance Minister Tendai Biti had projected that the country would end the year with an inflation rate of 4,5 percent.
Latest data released by the Zimbabwe National Statistics Agency (Zimstat) show that the year-on-year inflation rate for last month gained 0,7 percentage points on the November rate of 4,2 percent.
“This means that prices as measured by the all items Consumer Price Index (CPI) increased by an average of 4,9 percentage points between December 2010 and December 2011,” said Zimstat.
The agency said the year-on-year food and non- alcoholic beverages inflation prone to transitory shocks stood at 5,81 percent while non-food inflation stood at 4,50 percent.
The month-on-month inflation rate in December 2011 was 0,2 percent shedding 0,3 percentage points on the November 2011 rate of 0,5 percent.
“This means that the rate of change in prices as measured by all items Consumer Price Index increased by an average of 0,2 percentage points from November 2011 to December 2011.”
The month-on-month food and non-alcoholic beverages inflation stood at 0,33 percent last month shedding 1,15 percentage points on the November rate of 1,48 percent.
The month-on-month non-food inflation stood at 0,15 percent gaining 0,06 percentage points on the November 2011 rate of 0,09 percent.
The CPI last month stood at 99,9 percent compared to 99,8 percent the previous month and 95,3 percent in December 2010.
An economist Mr Christopher Mugaga said: “The Government has failed to contain inflation figures within its target in 2011.
“What it means is that the Government is failing to control inflation and this also reflects that it is also failing to deal with non-quantitative issues in the economy which also comes to raise the argument whether capacity utilisation in the manufacturing sector is moving or not.”
He said this was despite the Confederation of Zimbabwe Industries saying capacity utilisation had improved from an average of 49 percent in January 2011 to 57,2 percent at the end of the year.
Mr Mugaga said electricity and water tariffs were promoting the spiralling of inflation.
He called on the Government to urgently address tariffs being charged by parastatals.
Another economic commentator Mr Peter Mhaka said: “As a result of high utility charges coupled with elections, the outlook will be heavy,” he said.
Meanwhile, the African Development Bank has said the major determinants of inflation in the country may shift significantly this year from last year.
Analysts contend that in 2012 inflation in Zimbabwe would largely be driven by the rand/United States dollar exchange rate, local utility tariff adjustments as well as inflation in South Africa.
The AfDB said in its monthly economic review for December 2011 that the main drivers of annual inflation last year included communications, transport, housing, water, electricity and other fuels, and education.
“Rentals, rates and domestic power have been key drivers of inflation,” it said.
The AfDB said with low average incomes and loss of employment in some sectors of the economy, many people were relying on income from rentals as a major source of income.
“This implies a continuous upward review of rentals,” said the AfDB.
Continuous escalations in rentals, electricity, water and education suggests that stakeholders should engage to find a solution. — Business Reporter/New Ziana.
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