Oliver Kazunga, Senior Business Reporter
THE country’s annual rate of inflation gained 0,28 percentage points last month to -0.65 percent, latest data from the Zimbabwe National Statistics Agency (Zimstat) show.
Zimstat said the year-on-year inflation rate for December 2016 was -0,93 percent.
“This means that prices as measured by the all items Consumer Price Index (CPI) decreased by an average of -0.65 percentage points between January 2016 and January 2017,” said the agency.
Month-on-month, the rate of inflation was 0,23 percent in January after gaining 0,18 percentage points on the December 2016 rate of 0,06 percent.
The month-on-month food and non-alcoholic beverages inflation rate stood at 0,80 percent in January 2017, gaining 0,42 percentage points on the December 2016 rate of 0,38 percent.
“The month on month non-food inflation rate stood at -0.03 percent, gaining 0.06 percentage points on the December 2016 rate of -0.09 percent.
In his 2017 monetary policy statement presented on Wednesday, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said the low food inflation in 2016 was mainly driven by declines in prices of milk, cheese and eggs, meat, fruits, and vegetables among others largely reflected increased competition in the retail sector.
Since September 2014, Zimbabwe has been in deflation mode.
The Central Bank boss noted that deflationary pressures still persisted in the economy largely underpinned by competition from cheap imports, international oil price slump as well as low disposable income.
On the outlook, Dr Mangudya projected that inflation was expected to move into positive territory for the first time this year since 2014.
He said this was premised on the anticipated increase in international oil prices and domestic sector recovery.
“There are strong indications that oil supply will fall on the global market, following the agreement by oil producing nations to cut production in 2017.
“This positive trajectory is expected to be reinforced by the general recovery of the economy in 2017 on account of the expected strong agricultural outturn which is going to increase disposable income,” he said.