December inflation slows to 348.59% year on year

12 Jan, 2021 - 00:01 0 Views
December inflation slows to 348.59% year on year

eBusiness Weekly

Business Writer
Zimbabwe’s official inflation stood at 4.22 percent in December 2020 gaining 1.07 percentage points on the November 2020 rate of 3.15 percent, according to Zimstat.

The year on year inflation rate (annual percentage change) for the month of December 2020 as measured by the all items CPI stood at 348.59 percent from 401.66 percent in November.

The out turn means the country missed projections made by Treasury.

In his 2021 National Budget, Finance and Economic Development Minister Mthuli Ncube had forecast month-on-month inflation to close the year at around 2 percent and the respective annual inflation at around 336 percent.

The Treasury 2020 end of year projections could have been achieved had the trend that prevailed since August continued.

But the month of December witnessed an upsurge in price increases which coincided with increase in reserve money to $20 billion from an average $13 billion before December.

The price increases also coincided with the depreciation of the exchange rate on the parallel market from approximately 100 in November to 115 in December.

This saw retailers adjusting their prices accordingly.

Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya said businesses were getting away with price increases during the December period, because of strong demand.

“Unfortunately, businesses in Zimbabwe were used to high mark ups and the price increases are a continuation of the high mark ups,” he said then.

For 2021, annual inflation is projected to close at 135 percent while month-on-month inflation is expected to be below 1 percent.

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