Inflation rears its ugly head again

By Ndakaziva Majaka

The annual rate of inflation for the month of May surged by 0,27 percentage points from 0,48 percent in April, spelling more trouble for the embattled consumer.

Inflation refers to the rate at which prices are increasing.

Before February this year, the country was in negative inflation territory for 29 months running. It broke into positive February in February at the back of cost-push pressures that are eroding incomes.

Official data released yesterday by the Zimbabwe National Statistics Agency (Zimstat) indicate that May’s annual inflation firmed to 0,75 percent from 0,48 percent in April.

“This means that prices as measured by the all items Consumer Price Index (CPI) increased by an average of 0,75 percentage points between May 2016 and May 2017,” Zimstat said.

Month-on-month, May’s inflation rate stood at 0,03 percent, down 0,02 percentage points on the April rate of 0,05 percent.

Simply put, this means that prices as measured by the all items CPI increased at an average rate of 0,03 percent from April to May.

“The year-on-year food and non-alcoholic beverages inflation prone to transitory shocks stood at 1,92 percent whilst the non-food inflation rate was 0,21 percent,” observed Zimstat.

“The month-on-month food and non-alcoholic beverages inflation rate stood at 0,07 percent in May 2017, gaining 0,43 percentage points on the April 2017 rate of -0,36 percent.

“The month on month non-food inflation rate stood at 0,01 percent, shedding 0,24 percentage points on the April 2017 rate of 0,25 percent,” the statistics agency added.

The CPI for the month ending May 2017 stood at 97,09, compared to 97,07 in April and 96,37 in May 2016.

This comes as market watchers have also cautioned that consumers must brace for basic goods price increases as millers and manufacturers comply with a government directive requiring them to add nutrients in the production of most basics such as mealie-meal, cooking oil, sugar and flour, which is used to make bread.

While official estimates have projected that the inflation rate could average 1,1 percent this year, the figure appears conservative.

The International Monetary Fund (IMF) has since warned that Zimbabwe’s annual inflation could hit 6,6 percent next year, driven by rising food prices and election spending. Daily News