Net credit to Govt rises 94pc: RBZ

via Net credit to Govt rises 94pc: RBZ | The Herald 17 November 2014

GOVERNMENT issued an estimated $305 million worth of Treasury Bills in the nine months to September to settle part of its debts and meet some of its daily obligations. As a result, net credit to Government registered a 93,53 percent annual growth in the same period. In its monthly economic report for September, the Reserve Bank of Zimbabwe said the TBs issued by the Government rose by $146 million from about $159,2 million in January.
The Government continues to turn to TBs to raise funding as its fiscal space remains constrained.

On a monthly basis, net credit to the Government increased by 3,62 percent from $437,47 million in August to $442,44 million in September 2014, the central bank said.
Annual broad money growth slowed to 12,2 percent in September from 13,6 percent a month earlier, underpinned by deceleration in deposits growth, as well as weak growth in credit to the private sector. On a monthly basis, domestic credit rose from $4,23 billion in August to $4,27 billion million in September 2014.

Loans and advances were largely channelled to agriculture (19,05 percent), manufacturing (17,12 percent) and distribution (16 percent). Households accounted for 16,55 percent of total loans and advances to the private sector.

Meanwhile, annual rate of inflation shed 0,09 percentage points on the September rate of 0,09 percent to minus 0,001 percent in October, official statistics show.
This means prices, as measured by the all items consumer index, decreased by an average of 0,001 percent in the 12 months to October 2013.

“The year-on-year food and non-alcoholic beverages inflation prone to transitory shocks stood at minus 3 percent while non-food inflation rate was 1,59 percent, the Zimbabwe National Statistical Agency reported.

The rate of inflation measures the magnitude of an increase or decrease in prices over a given period, usually at yearly or monthly intervals.
Monthly inflation rate in October stood at minus 0,11 percent, shedding 0,10 percentage points on the September rate of minus 0,01 percent.

“This means that prices as measured by the all items CPI decreased at an average rate of 0,11 percent from September to October,” Zimstat said.
Zimstat said monthly food and non-alcoholic beverages inflation stood at minus 0,24 percent in October after gaining 0,10 percentage points.

“The month-on-month non-food inflation stood at minus 0,04 percent, shedding 0,20 percentage points on the September rate of 0,15 percent.”
Economists contend that Zimbabwe continues to experience low levels of inflation due to tight liquidity, which has frozen price adjustments. While some analysts attributed declining inflation to price correction, poor company results mean firms marked down prices to drive demand. The annual inflation rate has continued to trend down since January (0,4 percent), hitting an all time low rate of minus 0,9 percent in March.

This contrasts sharply with the country’s all-time high inflation rate which peaked at 231 million percent at the last official count in August 2008.