- TCPL for an individual stood at ZWL$3,750
- Household of 5’s TCPL up 4.42% from ZWL$17,957 in September
- Annual October inflation rate slid 188.2 percentage points
Harare – Latest statistics released by the Zimbabwe National Statistics Agency (ZIMSTAT) shows that for the month of October, an individual needed ZWL$1,522 to buy food and considered being above the food poverty line (FPL). The total consumption poverty line (TCPL) for the same individual stood at ZWL$3,750. If an individual does not consume more than the TCPL, he or she is deemed poor.
Also, TCPL for an average family of five (5) surged 4.42% to settle at ZWL$18,750 from ZWL$17,957 needed in September. This is the amount an average household required to buy both food and non-food items in order for them not to be categorised as poor. TCPL has been on an upward trajectory in line with rising inflation. In August it stood at ZWL$15,573 while in January it was at ZWL$4,492.
For the same month, annual inflation rate as measured by all items Consumer Price Index (CPI) came in at 471.25% shedding 188.2% from September level. On a month-on-month perspective, inflation rate was 4.37%. However, it is vital to note that October annual inflation outturn was one of the best since October last year. The major driver of prices in the basket tracked by ZIMSTAT has been the food category. This is due to the fact that the country has suffered a back-to-back drought which has affected agriculture production.
The current poor macro-economic conditions and below-average harvest in 2020 continues to affect access to food and is driving high needs to import. With the declining global yields, cost of importing is also going up leading to higher than normal prices. According to an internet tabloid FEWSNET, staple maize import needs for Zimbabwe are estimated at nearly 1 million metric tonnes for the 2020/21 consumption year which started in April 2020. This year cereal production is estimated at 1.25 million tonnes including winter crops.
Nevertheless, inflation moderation being experienced in the second half of the year is easing consumer burden though price level is still high for many. This came after the restriction of mobile money transactions, clamping down excessive base money growth as well as introduction of a market-based exchange rate management system by RBZ. Buttressing the monetary policy front, Treasury is now spending sustainably which reduces the need for money creation to cover the expenditure shortfalls.
In the outlook, inflation rate is expected to continue nosediving if authorities commit to prioritisation of production and macro stability as espoused in the recently launched National Development Strategy. This will build from the current exchange rate stability. Also, the country is projected to experience an El Viejo -wet weather conditions suitable for agriculture. The mining sector is also expected to recover with a rally in global commodity prices given the recent news of successful covid-19 vaccines by Pfizer and Moderna in the USA. These sectors are key for economic recovery as they contribute large share of forex generation.
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