• Blended inflation rate: 47.6% 
  • Month-on-month inflation: 5.4% 
  • TCPL surge: 177.8% 
  • EA inflation estimate: 929.22% 

 Harare- Zimbabwe's inflation continues to rise, according to the latest data released by ZIMSTAT in February 2024. This indicates that the factors destabilizing the exchange rate are still at play. The annual blended inflation rate has increased by 12.8 percentage points, reaching 47.6% compared to the previous month's rate of 34.8%. However, the month-on-month inflation rate has slightly decreased by 1.2 percentage points, dropping from 6.6% in January to 5.4% in February.

 Unfortunately, Zimbabwe has been unable to keep the monthly blended inflation rate below the target of 5% set by the authorities at the beginning of 2024. The highest monthly inflation rate observed within the target range was 12.1% in June 2023, and it is expected that this peak will be surpassed in the coming months.

 In 2020, ZIMSTAT introduced a blended consumer price index that combines the local currency (ZWL) and the US dollar (USD) consumer price indices, reflecting Zimbabwe's dual currency system. This measure was intended to provide a more comprehensive assessment of inflation. However, it has not effectively addressed the underlying issues contributing to the persistent inflation problem. Moreover, the significant weight of the USD in the inflation statistic obscures the true erosion of the local currency's value, which is concerning.

 Additionally, the Total Consumption Poverty Line (TCPL) for an individual in February rose significantly to ZWL552,745.80, a surge of 177.8% compared to the previous value of ZWL198,981.37. This increase highlights the growing expenses associated with maintaining a basic standard of living and underscores the rapid devaluation of the currency.

 Looking ahead, inflationary pressures are expected to persist. According to Equity Axis estimates, the inflation outlook for the Zimdollar for the remainder of the year is unfavorable, projecting an outcome of 929.22%. This projection takes into account variables such as the Zim Dollar Poverty Datum Line (PDL) and primary price data for selected goods and services.

 In response to the inflationary challenges, it is expected that the Reserve Bank of Zimbabwe (RBZ) will continue to implement strict monetary policies aimed at achieving stable inflation. These policies may include maintaining high interest rates and implementing complementary measures. The upcoming release of the 2024 Monetary Policy will provide further insight into the strategies and measures that will be implemented to address the economic conditions and tackle the challenges posed by inflation.

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