HARARE – Zimbabwe's annual inflation retreated by 0, 27 percentage points to settle at 0,59 percent in October 2013 from 0,86 percent recorded in prior month, the Zimbabwe National Statistics Agency (ZimStats) said.
This means that prices as measured by the all items’ Consumer Price Index (CPI) increased by an average of 0,59 percentage points between October 2012 and October 2013.
Market observers say the sustained drop indicates weak consumer demand against a backdrop of tight liquidity conditions that have eroded most households’ disposable incomes coupled with benefits accrued from the fall of the South African Rand against the United States dollar.
ZimStats said month-on-month inflation rate was – 0, 01 percent, shedding 0,04 percentage points from September’s 0,05 percent.
“This was mainly weighed down by declines in routine Maintenance, Medical aid contributions and to a lesser extent Food and Clothing weights,” it said.
The year-on-year food and non-alcoholic beverages inflation prone to transitory shocks stood at -0,74 percent while the non-food inflation rate stood at 1,25 percent.
The month-on-month food and no-alcoholic beverages inflation stood at 0,04 percent in October 2013, shedding 0,22 percentage points on the September 2013 rate of – 0.18 percent.
The month-on month non-food inflation settled at -0,04 percent, shedding 0,21 percentage points on the September 2013 rate of 0,17 percent.
The CPI for the month ending October 2013 stood at 100,32 compared to 100,33 in September 2013 and 99,74 in October 2012.
Zimbabwe’s year-on-year inflation is expected to slow down to 3,9 percent from the projected 5 percent, due to the weakening rand.
The softening of the South African rand since the beginning of the year has helped Zimbabwe maintain a downward trend as it imports close to 60 percent goods from its southern neighbour.
Analysts said the depreciation of the South African currency was a result of the unending job disputes in the mining sector, particularly among platinum producers — a development that has seen output declining.
However, Zimbabwe is largely dependent on imports from South Africa.
This has led to calls by economic analysts for government to create an enabling environment for industry to increase productivity.