Zimbabwe Deflation Deepens as Consumer Prices Fall for 2nd Month

via Zimbabwe Deflation Deepens as Consumer Prices Fall for 2nd Month – Bloomberg by Godfrey Marawanyika and Brian Latham Apr 15, 2014

Consumer prices in Zimbabwe fell for a second month in March as deflation in the southern African economy deepened.

Consumer prices declined by 0.9 percent last month after falling 0.5 percent in February, the Harare-based statistics agency said today in an e-mailed statement. In the month, prices decreased 0.2 percent, the agency said.

Zimbabwe is struggling to grow the economy amid a slump in consumer spending while manufacturers have been hurt by a flood of imports that are cheaper than what can be produced locally as well as smuggling. Sales of consumer goods declined as much as 30 percent in February, according to government data.

The economy will face deflationary pressures this year, the Finance Ministry said in a report in April.

Zimbabwe abandoned its national currency in 2009 in favor of the dollar, South African rand and three other currencies to stem record inflation that the International Monetary Fund estimates accelerated to as much as 500 billion percent.

The IMF forecasts the $9.8 billion economy will expand 4.2 percent this year and 4.5 percent in 2015. Zimbabwe has the world’s biggest platinum and chrome reserves after South Africa as well as deposits of diamonds, iron ore, gold and coal.