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Inflation down 0.62 percent: ZimStat

THE National Statistics Agency (Zimstats) has said the country’s inflation for July fell 0,62 percentage points to 1,25 percent from 1,87 percent in June as a result of the constant drop in the aggregate demand.
Month-on-month was at -0,38 percent, shedding 0,25 percentage points from -0,13 percent. Food and non-alcoholic month-on-month was at -1,14 percent, shedding 0,81 percentage points from -0,33 percent in June.
The month-on-month non-food inflation was at -0,004 percent, losing 1,11 percentage points from 0,03 percent.
Inflation is this year forecast to close the year at 3,9 percent and predicted to decline further as the country’s economy slows down and local prices track the declining value of the South African rand, resulting in generally decreasing local prices.
The country is largely dependent on imports from South Africa.
Economists on Friday said inflation will most likely remain under control this year with underlying core inflation rates projected to trend sideways or down throughout most of 2013.
“The debt and confidence crisis will have a dampening effect on global economic performance and growth, which will in turn reflect in weak demand including imports. In addition, the growth dynamics in the local economy should only improve in the second half of the year at the earliest,” an economist said.
“Reflecting this subdued growth outlook over the next year or so, I forecast relatively stable inflation in the economy reaching 2,6 percent within the first half. When demand is generally weak, as is the forecast, companies will cut their prices and the inflation rate will decline,” added the economist from the Reserve Bank of Zimbabwe.
Some analysts said whilst s inflation was not trending downwards, the decline might not be sustainable.
They said there is a risk that whilst inflation seems to be slowing down, the trend will sharply reverse given the fact that Zimbabwe this year will remain a heavy food importer.Advertisement