Monthly inflation hits 15,7% as govt moves to ease price hikes
MONTH on month inflation rate for the period May 2023 rose significantly to 15,7% on the back of a sharp increase in prices, Zimbabwe National Statistics Agency (ZIMSTAT) reported Friday on the back of government’s interventions to ease the price hikes.
During the period, the consuming public experienced excessive price hikes following the accelerated depreciation of the exchange rate which now hovers around US$1: ZWL 3 000 on the parallel market and US$1: ZWL 1888 on the official market.
Price hikes in Zimbabwe and inflation rates are not always a reflection of economic fundamentals but perceptions anticipating exchange rate depreciation which often sees businesses engaging in hedging or forward pricing to protect the value of stock.
Data released by the agency shows that in the month of May 2023, the consistent record of reductions in inflation figures was disrupted, pushing the rates into a double digit margin.
“The month-on-month inflation rate in May 2023 was 15,7%, gaining 13,3% on the April 2023 rate of 2,4%. The month-on-month inflation rate is given by the percentage change in the index of the relevant month compared with the index of the previous month,” said Zimstat.
This comes at a time when the government has already announced a raft of measures set to ease the pressures going forward which includes removal of duty payments on basic which will also come into the country free of import duties and taxes.
The initiative is expected to avail cheaper imports for members of the public who can no longer afford the expensive local commodities being charged on a speculative basis.
Businesses were also allowed to retain all their foreign currency earned for internal use so as to reduce the pressures of pursuing the US$ on the parallel market.
These measures are over and above the Reserve Bank of Zimbabwe interventions like gold coins, tokenized digital coins among others.
However, the year-on-year inflation rate for the period as measured by the all items Consumer Price Index (CPI) was 86,5% given by the percentage change in the index of the relevant month of the current year compared with the index of the same month in the previous year.
The Consumer Price Index (CPI) was 324,63 in May 2023, 280,48 in April 2023 and 174,3 in May 2022.
The CPI for Food and non- alcoholic beverages had the highest month-on-month inflation rate of 25.9 percent followed by Health at 14.8 percent.
The Food Poverty Line (FPL) for one person in May 2023 was $30,109.00.
The Total Consumption Poverty Line, which is derived by adding the non-food consumption expenditures of poor households to the FPL for one person, was $39,927.00 in May 2023.