Tapiwanashe Mangwiro
HARARE – ZIMSTAT has released March 2020 inflation figures, with the month on month inflation continuing to go northwards. Zimbabwe recorded a significant rise in the monthly inflation rate for March according to statistics from Zimstat.
The month on month inflation rate put on 13.07 percentage points to 26.59% from February’s 13.52%. This means prices increased by an average 26.59% in that month.
A sharp increase was recorded as the year on year inflation measured by all items CPI came in at 676.39%. This means that prices increased by a level of 676.39% during the past 12 months.
CPI has moved to 810.40 from 104.38 recorded a year earlier. A month earlier it stood at 640.16 after it added 170.24 points.
Monthly events shows that the m-o-m inflation of 26.59% is in line with the average depreciation of the local currency on the interbank market mid March when the Reuters System debuted before the managed peg exchange rate of 25.
The month on month inflation rate is however lagging behind the 31.25% depreciation on the parallel market of 12.04% from 16 February – 16 March 2020. The inflationary trend dents all the efforts being made by the government in order to cushion vulnerable families as the $200/family is continuously being eroded by each day.
If ZimStat is to be consistent with their data collection dates of between 12 and 17 of each month, April inflation will come in at higher levels as the local currency depreciated 17% early-April leaving ample time for price adjustments before data collection as well as the lockdown effect.
The 50% annual inflation target set by Treasury is beginning to feel like a pipe dream as prices will continue to spiral upwards due to Covid-19 induced shortages.
In order to rein in inflation, by facilitating the smooth procurement of food stuffs by retailers in order to avoid shortages as some retail shops are beginning to be worried about restocking. Also the central bank will need to control reserve money and money supply growth and more importantly have increased forex on the interbank market, which would help in having a uniform exchange rate and would remove all pricing distortions.
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