via Zim’s inflation continues falling | The Zimbabwean by Clemence Machadu
The country’s inflation has been on a consecutive downward spiral over the past six months, with a cumulative marginal fall of 1.73 percent.
What is more interesting is that the monthly margin by which inflation is falling continues to even grow bigger. If that trend continues steadily, we will have deflation before the end of the year.
The latest inflation rate for the month of July, released yesterday, saw inflation substantially falling down to 1.25 percent.
Inflation topped 2.98 percent in February 2013, but fell down by 0.22 percent to 2.76 percent in March. It continued to fall in April, by a marginal 0.27 percent, to 2.49 percent. Come May it sheds 0.29 percent, to land at 2.2 percent. June saw inflation again falling down by 0.33 percent to 1.87 percent. The biggest fall in inflation was realised last month, when inflation fell down by 0.62 percent to 1.25 percent.
Zimbabwe’s inflation is the lowest in SADC region and the continued fall will further improve the attractiveness of the country’s macroeconomic environment.
The sustained fall in inflation means that the real consumption levels of Zimbabwean consumers is going up, albeit with the same level of income, thereby improving their standard of living. It also gives households the incentive to save, thereby improving the country’s liquidity.
The low inflation rate is also ideal for attracting foreign investors. A stable inflation rate is indispensable for planning purposes, as companies’ and national budgets will not be eroded, resulting in budget deficits.
Analysts are even forecasting that inflation will continue on a downward trend for the next months.