- October inflation accelerates to 54.49% from 51.55% in September
- MoM inflation shoots past 6%
- Overall price jumps higher than government’s expectations
HARARE – Consumer prices rose for the second consecutive month in October 2021, jumping by 54.49 percent year over year, as economic challenges continue to pile up for the Mnangagwa administration.
For the month of September, inflation stood at 51.55 percent from 50.24 percent in August. Prior to that, annual inflation had seen a 13-month stretch easing Southwards, giving hope that government was on track with its efforts to stabilize price pressures within the economy.
However, data from October rubber stamps concerns that the county’s overall economic state remains closer to depression.
The monthly Consumer Price Index continued upwards to close at 6.40 percent from the September 2021 rate of 4.73 percent.
The overall price jumps came in higher than government’s expectations of below 3 percent month-on-month inflation and below 53 percent year over year. Initially, government was targeting annual inflation to fall below 10 percent by year-end, a projection it revised upwards to below 25 percent as the year progresses.
But as the economy is heating up amidst Zimbabwe dollar’s high rate of depreciation and other structural weaknesses exacerbated by weakening global economic fundamentals, government changed its projections to a target of between 25 to 35 percent, which it again recently changed to between 35 to 53 percent by year-end.
The rate of change in inflation is more relevant to the country’s status as a retail economy, as evidenced by data released by ZIMSTAT last week.
The statistics show that the Retail and Wholesale sector accounted for 19.24% of the country’s total GDP in 2020, way ahead of Agriculture (7.61%) and Mining (10.5%).
As prices and exchange rates are rising in advance of wages, consumers feel consistently behind the eight-ball. As is the case with many other African states and other developing nations, this has the effect of triggering political pressure.
Individual categories of goods from the overall index show that Food and Non-Alcoholic Beverages prices are up 7.56 percent in October on a month-on-month basis and up 61.35 percent year-on-year. Food alone accounts for 30.34 percent of the overall CPI increase.
Housing, water, electricity, and gas expenses combined are up over 40 percent during this period on a year-on-year basis.
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