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Harare Bureau
The annual rate of inflation shed 0.18 percentage points on the September figure to minus 3,29 percent in October, as tight liquidity in the economy and low aggregate demand together with the weakness in the South African rand against the US dollar, continue to exert pressure on prices.

According to the Zimbabwe National Statics Agency all items consumer index, this means that prices fell by an average of 3,29 percent between October 2014 and October 2015.

“Year on year food and non alcoholic beverages inflation prone to transitory shocks stood at minus 4,0 percent whilst the non-food inflation rate was minus 2,95 percent,” ZimStat reported.

The tight liquidity situation and low aggregate demand mean prices have continued to be under pressure with retailers of fast moving consumer goods such as Delta and Innscor leading the way in trading down in order to boost demand.

Liquidity has remained a big issue in the local economy since the country adopted a multi-currency regime dominated by the dollar, but poor export performance and low foreign investment have made the situation worse.

Further, the continuing weakening of the South African rand has also helped inflation on the local market remain low despite the high cost of production, which naturally would exert pressure on mostly imported products consumed in Zimbabwe.

Monthly inflation rate for last month was minus 0.29 percent gaining 0.07 percentage points on the prior month (September) inflation rate of minus 0.36 percent.

ZimStat said that this means that prices of goods and services as measured by the all items CPI decreased at an average rate of minus 0.29 percent from September 2015 to October 2015.

Monthly food and non-alcoholic beverages inflation rate was minus 0.53 percent in October, shedding 0.06 percentage points on the September rate of minus 0.47 percent.