Zim closes December stuck in negative inflation at -0.93%
Zimstat / FinX
HARARE – Zimbabwe’s annual inflation rate for the month of December 2016, as measured by the all items consumer price index gained by 0.16 percent to -0.93 percent, from November’s rate of -1.09 percent.
“This means that prices as measured by the all items CPI decreased by an average of -0.93 percentage points between December 2015 and December 2016” said Zimstats today.
The marginal gain was on the back of price increases in selected food items such as bread and cereals, oils and fats, fish and sea food. Injection of additional liquidity through the introduction of bond notes also contributed to the increase which coincided with a traditional spending month. However declines in the prices of gas, liquid fuels, housing rentals, fruit, vegetables, milk, cheese and eggs ensured the country’s inflation remained in the negative.
Zimbabwe remains in deflation mode since 2014. According to the 2017 National Budget, the decline in domestic prices during 2016 was driven by a combination of continued weakening in domestic demand, depreciation of the South African rand against the US dollar, and subdued international oil prices.
In its October 2016 Global Economic Outlook, the IMF projected that Zimbabwe’s average inflation is expected to close the year 2017 at 4.6 percent, while the Zimbabwean government projects an average inflation rate of 1.1 percent.
The month-on-month inflation rate in December 2016 also gained by 0.04 percent to 0.06 percent, compared to November’s rate of 0.02 percent, meaning that prices as measured by the all items CPI increased at an average rate of 0.06 percent from November 2016 to December 2016.
The year on year food and non-alcoholic beverages inflation prone to transitory shocks stood at -0.95 percent, with gains noted on bread and cereals, fish and sea food, oils and fats, sugar and other products. Year on year non-food inflation stood at -0.92 percent.
Zimstats said that month-on-month food and non-alcoholic beverages inflation rate declined to 0.38 percent in December 2016, shedding 0.16 percentage points on the November 2016 rate of 0.54 percent. The month-on-month non-food inflation rate however gained by 0.13 percent to -0.09, compared to November 2016’s rate of -0.22 percent.