Month-on-month inflation jumps 0,86%

ZIMBABWE’S blended month-on-month inflation rate in May stood at 1,80 percent gaining 0,86 percentage points on the previous month’s rate of 0,94 percent, official data released on Tuesday shows.

In a latest update, the Zimbabwe National Statistics Agency (Zimstat) also indicated that the year-on-year inflation rate for the month of May 2021 as measured by the all items blended Consumer Price Index (CPI) increased by 74,57 percent between May 2020 and May 2021.

“The month-on-month inflation rate in May 2021 was 1,80 percent gaining 0,86 percentage points on the April 2021 rate of 0,94 percent,” said the agency.

“The blended CPI for the month ending May 2021 stood at 115,61 compared to 113,57 in April 2021 and 66,23 in May 2020,” it said.
A blended inflation model entails a combination of inflation for prices that are quoted in forex and inflation for prices quoted in local currency.

Zimstat has been publishing blended inflation alongside consumer price Index (CPI) following adoption of the dual pricing system, which is supported by Statutory Instrument 185 of 2020, which allowed entities to quote and sell goods and services in both US dollar and Zim dollar.

Financial market analyst, Mr George Nhepera, said the marginal increase could be related to the fluctuating exchange rate in the alternative markets, which is still a basis of price determination for goods and services in some retail shops across the country.

He, however, said the 0,86 percent variation in inflation was insignificant to both the industry and members of the public.

“Nevertheless, going forward we should guard against an approval of other incremental costs that may push the month-on-month inflation to a large increase such costs of electricity, petrol and household water and rates bills,” said Mr Nhepera.

Monetary authorities have reaffirmed their commitment to sustaining the disinflationary path to the end of the year and expects year-on-year inflation to go down to below 55 percent by July 2021.

The Reserve Bank of Zimbabwe (RBZ) Monetary Policy Committee has also reaffirmed its strong commitment to continue with the conservative monetary policy stance to ensure that the prevailing price stability was maintained.

Meanwhile, Zimstat yesterday released the latest Poverty Datum Line (PDL) on food for one person in May 2021, which was at $4 139,10.

“This means that the minimum needs basket cost that much per person in May 2021. This represents an increase of 1 percent over the April 2021 figure of $4 099,95,” it said.

The Total Consumption Poverty Line (TCPL) for Zimbabwe stood at $5 770,64 per person in May 2021 and Zimstat said this means that an individual required that much to buy both non-food and food items as at the period under review in order not to be deemed poor.

“This represents an increase of 1,7 percent when compared to the April 2021 figure of $5 672,47,” said Zimstat.

It said the poverty datum lines vary by province as prices vary from place to place.

“The quantities of commodities consumed at base year in the minimum needs basket which is consistent with the preferences of the poor individuals and households in Zimbabwe are fixed.

“The variations in the value of the basket are explained by changes in average prices,” said Zimstat. — -chroncicle.l.zw