Monthly inflation falls back below RBZ target

...annual figure comes in just shy of July projection

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  • Month-on-month inflation dropped to 2.56%
  • Annual inflation dropped to 56%, the first time it has been two digits in over two years
  • FPL and TCPL scaled up by 2.5%

Harare – The Zimbabwe National Statistics Agency (ZIMSTAT) reports that Zimbabwe’s month-on-month inflation fell by 1.32 percentage points in July to settle at 2.56 percent from the June figure of 3.88 percent.

The Reserve Bank of Zimbabwe (RBZ) has a monthly inflation growth target of below three percent and recently adjusted its annual inflation target to below 25% by the end of the year from a previous projection of 10%.

Complementarily, the Bank also resolved to further tighten monetary policy by reducing the reserve money growth target from 22.5% per quarter to 20% per quarter while continuing to review the reserve money growth target to achieve and maintain the stability of inflation and the exchange rates.

In July the annual inflation figure came in just shy of a target at 56.37 percent after shedding 50.23 percentage points but however, this is the first time inflation has been just two digits in over two years.

Source: ZIMSTAT/Equity Axis Research

Although prices are still rising rapidly, the July 2021 annual inflation figure compares favorably when put against the record high experienced in July 2020 at 837.53%.

Meanwhile, poverty datum lines scaled up in line with the risen monthly inflation.

The Food Poverty Line (FPL) which represents the amount of money required by a single individual to afford the minimum required daily energy intake of 2100 calories increased by 2.5%, almost equal to the increase in monthly inflation, to ZW$4,379.11.

The Total Consumption Poverty Line (TCPL) which includes non-food essentials on top of FPL also increased by 2.5% to settle at ZW$6,126.41.

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