via ‘Govt must stimulate domestic demand’ – The Zimbabwe Independent January 22, 2016
ZIMBABWE’S persistent deflationary environment is seen forcing Reserve Bank of Zimbabwe (RBZ) governor John Mangudya to take an inflation-oriented stance in his monetary policy statement that is due early this year.
Leading UK based research unit NKC African Economics (NKC) said the country has no choice but to tackle deflation given that it is detrimental to productive sectors of the economy, consequently reducing economic growth.
“The country still faces a liquidity crunch due to cash shortages, which is depressing aggregate demand. In the wake of deflation being around for more than a year and continued business shutdowns, we expect the RBZ to introduce an inflation-oriented policy at its next monetary policy presentation,” said NKC in a commentary on Zimbabwe’s latest inflation figures for the month of December 2015.