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Oliver Kazunga, Senior Business Reporter
ZIMBABWE’S annual rate of inflation gained 0,71 percentage points on the January rate of -0,65 percent to 0,06 percent last month moving out of deflation for the first time in three years.

Latest data from the Zimbabwe National Statistics Agency (Zimstat) show that prices, as measured by the all items Consumer Price Index (CPI), increased by an average of 0,06 percentage points between February 2016 and February 2017. Zimbabwe has been on a deflationary mode since September 2014.

“The year on year Food and Non Alcoholic beverages inflation prone to transitory shocks stood at 1,29 percent while the non-food inflation rate was -0,51 percent.

“The month-on-month inflation rate last month was 0,61 percent gaining 0,38 percentage points on the January 2017 rate of 0,23 percent,” said the agency.

This means that prices as measured by the all items CPI, increased at an average rate of 0,61 percent from January 2017 to February 2017.

The month on month Food and Non Alcoholic Beverages inflation rate stood at 1,56 percent in February 2017, gaining 0,77 percentage points on the January 2017 rate of 0,80 percent.

The month-on-month non-food inflation rate stood at 0,17 percent, gaining 0,20 percentage points on the January 2017 rate of -0,03 percent.

Zimbabwe went into deflation mode largely underpinned by competition from cheap imports, international oil price slump as well as low disposable income.

In the 2017 monetary Policy Statement, Reserve Bank of Zimbabwe Governor Dr John Mangudya projected that on the outlook inflation was expected to move into positive territory for the first time this year.

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.

@okazunga