Harare – Zimbabwe’s inflation rose by 7.27 percentage points year-on-year in March to reach 66.8 percent up from 59.4 percent in February, the Zimbabwe National Statistics Agency (ZIMSTAT) reported on Monday 15 April.

Month on month inflation scaled 2.71 percentage points to 4.38 percent in March from 1.67 percent in February.

Driving annual inflation was a sustained growth in prices of most basic commodities which soared by 78.55 percent. Meat and sugar however, realised month on month declines.

The month-on-month food and non-alcoholic beverages inflation rate stood at 5.10 percent in March 2019, gaining 1.54 percentage points on the February 2019 rate of 3.56 percent, while non-food inflation rate stood at 4.05 percent, gaining 3.35 percentage points on the February 2019 rate of 0.70 percent.

“The CPI for the month ending March 2019 stood at 104.38 compared to 100.00 in February 2019 and 62.58 in March 2018,” Zimstat said.

The surge in inflation comes on the back of monetary policy shift against which the Central Bank introduced the interbank exchange market and the RTGS$ among key policies presented in the February 2019 monetary policy.

The Reserve Bank Governor, Dr John Mangudya highlighted that the respective monetary policy shifts is expected to stabilise inflation and the exchange rate which was around that time trading at around 1:35.

The RTGS$ is currently trading at a rate of over 1:5 on the parallel market.

According to Equity Axis, “further growth is expected on the back of exchange rate weakness, El Nino drought and agricultural producer price adjustments.”

Meanwhile, the International Monetary fund (IMF) last week gave an indication that the country is heading towards a recession this year as it projected GDP to contract by 5.2 percent.

Likewise, IMF forecasts the country’s inflation to close the year above 40 percent.

However, Ncube maintains that government will put in place “appropriate fiscal” measures to bring inflation to single digit levels by year end.

Equity Axis News