Zimbabwe’s June inflation figures indicate a promising trend of economic stabilization, with the monthly inflation rate remaining unchanged, signaling potential stability in both inflation and exchange rates.
According to the latest report from the Zimbabwe National Statistics Agency (ZimStat), the month-on-month inflation rate for the ZiG Consumer Price Index (CPI) was 0.0 percent in June, showing no change in average prices between May 2024 and June 2024.
This steady inflation rate suggests an economic equilibrium, free from significant price fluctuations during this period. ZimStat stated, “The ZiG CPI for June 2024 showed no month-on-month change, marking a stable economic environment for consumers and businesses alike.”
A detailed analysis of the ZiG CPI components reveals that the Food and Non-Alcoholic Beverages category contributed minimally to the month-on-month change, showing a slight deflation of -0.1 percent. Similarly, the monthly inflation for alcoholic beverages and tobacco saw a marginal decline of -0.02 percent.
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This inflation stability benefits households by preserving their purchasing power, with inflationary pressures remaining largely absent. The central bank, following its latest Monetary Policy Committee meeting, noted that the stabilization measures implemented since April 2024 have yielded significant positive results. The committee expected June’s inflation rate to hover around 0 percent, driven by declines in both food and non-food inflation.
“The measures we have taken are yielding the desired results, with inflation coming under control faster than anticipated,” stated the central bank. Looking ahead, inflation pressures are expected to remain subdued, with projections indicating an inflation rate below 5 percent by the end of the year. This optimistic outlook is supported by a stable exchange rate, crucial for managing inflation.
“We are committed to ensuring that the growth in money supply remains consistent with our pro-growth inflation targets,” emphasized the central bank, reinforcing its strategy to maintain economic stability.
In contrast, the US dollar inflation rate for June 2024 exhibited a deflationary trend. The month-on-month inflation rate was -0.3 percent, down from 0.1 percent in May 2024. This reduction suggests a general decline in price levels when measured in US dollars, likely due to factors such as exchange rate dynamics and import price adjustments.
ZimStat stated, “The USD CPI’s month-on-month deflation reflects a broader trend of decreasing prices, which may benefit consumers but also signals underlying economic challenges.” Year-on-year, the USD inflation rate stood at 3.8 percent, indicating a longer-term inflationary trend despite the month-on-month deflation.
The Weighted inflation rate, which aggregates multiple indices, also showed deflation. The month-on-month rate for June 2024 was -0.2 percent, improving from -0.6 percent in May 2024. This measure’s slight gain indicates a reduction in deflationary pressures compared to the previous month.
ZimStat commented, “The Weighted CPI’s movement towards less deflation underscores a gradual stabilization in price levels across various economic sectors.” Food and Non-Alcoholic Beverages had the lowest contribution to the month-on-month change in the Weighted CPI at -0.18 percent, followed by Alcoholic Beverages and Tobacco at -0.03 percent.
June 2024 inflation statistics illustrate economic stability in local currency terms, alongside deflationary trends in USD and a slight easing of deflationary pressures in the weighted measure. ZimStat commented, “The diverse inflation measures underscore the complexity of Zimbabwe’s economic landscape, necessitating nuanced policy responses to sustain growth and stability.”
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