THE country’s inflation figures are projected to remain low due to the slowdown in the economy, a local analyst has said.
Business Reporter
The Zimbabwe Statistical Agency recently released the inflation figures with year-on-year inflation for the month of January having gained by 0,08 percentage points to 0,41% on the December figure of 0,33%.
While the year-on-year food and non-alcoholic beverages inflation, prone to transitory shocks, stood at -2,08%, non-food inflation rate was 1,67%.
“Outlook for inflation, however, is likely to remain low due to the slowdown that we are currently facing. Rand weakness may not really help us as most importers are now invoicing their goods in United States dollars so we won’t benefit much from it,” the analyst said.
The analyst said the decline in the inflation figures, however, did not benefit the general populace due to the harsh economic environment as companies are closing and disposable incomes continue to go down.
In 2013, inflation closed the year below 5% as projected by Treasury. Another local economist said the minimal gain in inflation reflected the scarcity of products, at the same time the fact that the country was heading towards deflation.
“Once we have scarcity, it will look like prices are going up until the scarcity situation is addressed. Why are people failing to procure goods? Maybe it’s because of liquidity or low demand in the market?” the economist said.
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The economist, however, said January and February were usually months of scarcity and the true trend would be known after the first quarter.
