Zimbabwe records two-digit inflation after two years

 Zimbabwe records two-digit inflation after two years

Zimbabwe records two-digit inflation after two years.

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Zimbabwe’s official year on year inflation rate for the month of July 2021 as measured by the all items Consumer Price Index (CPI) slowed to 56,37 % from 106,64% in June, the Zimbabwe National Statistics Agency (ZimStat) has said.

This is the first time the country has registered a two digit inflation figure in two years after it skipped to 175,66 % in June 2019 from 97,85% in May of that year.

Zimbabwe’s year-on-year inflation reached a post-dollarization high of 837,53% in July 2020. This means it was the highest since hyperinflation forced the government to abandon the Zimbabwe dollar in 2009 and embrace the United States Dollar as official tender.

In August 2020, inflation eased to 761,02% after one of the sources of growing inflation, the forex exchange parallel market was tamed when the central bank intensified a clampdown on mobile money agents and other digital money transfer platforms which were suspected to be the source of the problem.

From then year on year inflation rate has been trending downwards. 

It opened this year at 362,3 % and tumbled to 194,07% in April before going further down to 161,9 % in May.

“The year on year inflation rate (annual percentage change) for the month of July 2021 as measured by the all items Consumer Price Index (CPI) stood at 56.37 per cent. This means that prices as measured by the all items CPI increased by an average of 56,37 per cent between July 2020 and July 2021,” Zimstat said.

The month on month inflation rate in July 2021 was 2,56 % shedding 1,32 percentage points on the June 2021 rate of 3,88 %.

This means that prices as measured by the all items CPI increased by an average rate of 2,56 % from June 2021 to July 2021.

The month on month Food and Non Alcoholic Beverages inflation rate stood at 2,51 % in July 2021, shedding 0.70 percentage points on the June 2021 rate of 3,21 %. The month on month non-food inflation rate stood at 2,60 %, shedding 1.778 percentage points on the June 2021 rate of 4,38 %.

While inflation has been going down, Zimbabwe’s socio economic problem has been persisting.

In a recent report the World Bank said 500 000 Zimbabweans lost their jobs since the Covid-19 pandemic broke out last year igniting de-industrialisation, as it revealed extensive food shortages and worsening poverty.

In its report titled, Zimbabwe Economic Update (ZEU): Overcoming Economic Challenges, Natural Disasters, and the Pandemic: Social and Economic Impacts, the global lender said Covid-19 has affected both rural and urban jobs by almost similar measure, with 7,9 million ending up in abject poverty.

This figure represented about 49% of Zimbabwe’s estimated 15 million people.

Authorities have predicted that inflation will go down to 10% by year end and are envisioning a GDP growth of 7% this year.

The World Bank and IMF have predicted Zimbabwe economy will this year grow by 3,9% and 6% respectively.

Fidelity Hamilton Mhlanga

Fidelity Hamilton Mhlanga has been writing finance and business news over the past 5 years. He earned a BSC in Media and Society Studies and Masters of Development Studies from Midlands State University, in Zimbabwe. He follows mining, insurance, banking and energy stories. He is passionate about development and growth.

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