January inflation modestly rises to 3.52pc

16 Feb, 2018 - 07:02 0 Views
January inflation modestly rises to 3.52pc Gainers and losers: Zimstat/FinX

eBusiness Weekly

Zimbabwe’s inflation rate for the month of January recorded a marginal gain of 0.06 percent to 3.52 percent, compared to 3.46 percent in December last year.

The consumer price index for last month stood at 99.79 compared to 96.39 in January 2017.

Inflation has been on a steady rise since August last year and has recorded significant gains during the festive season when demand for goods and services was high; although the gains are now fading as we progress into the New Year.

The month-on-month inflation rate for January 2018 actually came down to 0.30 percent from 0.53 percent in the prior month, shedding 0.23 percent. The decline recorded in January was apparently due to low disposable income which eased demand.

On a year-on-year basis, gains were recorded in meat which rose 13.42 percent with fish and sea food edging up 14.45 percent. Liquid fuels went up 18.49 percent with non-durable household goods adding 15.97 percent.

Stationery recorded the highest gain of 35 percent, probably due to the schools opening period which happened during the month and pushed up the demand of stationery. Hospital services rose 3.37 percent with gas increasing 9.3 percent.

However, actual rentals maintained the declining trend, shedding 3.66 percent with education also declining 2.25 percent. There was a 2.55 percent decline in recreational and cultural services, with other services easing 1.25 percent.

“The year on year food and non-alcoholic beverages inflation prone to transitory shocks stood at 6.17 percent whilst the Non-food inflation rate was 2.29 percent”, said Zimstat.

“The month on month food and non-alcoholic beverages inflation rate stood at 0.39 percent in January 2018, shedding 0.90 percentage points on the December 2017 rate of 1.29 percent. The month on month non-food inflation rate stood at 0.25 percent, shedding 0.09 percentage points on the December 2017 rate of 0.16 percent”.

Meanwhile, the Reserve Bank of Zimbabwe has highlighted that, in the outlook, the biggest threatemanates from inflationary pressuresthat the economy faces from potential general price hikes driven byspeculative tendencies, arising from the mismatch between electronicbank balances and available foreign exchange.

“The emergence of foreign exchange rate premiums on the back of foreign currency shortages is, thus, symptomatic of the above mismatches that remain the key driver of inflation”, said the RBZ in the 2018 monetary policy. – FinX

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