The Zimbabwe Statistical Agency (ZimStat), a corporate body established through the Census and Statistics Act of 2007 and the main source of official statistics in the country says Zimbabwe Gold (ZiG), monthly inflation rose by 1.4 percent up from a 0.1% drop in July.
According to the agency, USD annual inflation was 3.7% in August, from 3.6% in July and 3.8% in June.
ZimStat on released data which shows that the inflation slightly increased during the period but remained within sustainable margins.
“The weighted month-on-month inflation rate was 0.4% in August 2024, gaining 0.5 percentage points on the July 2024 rate of –0.1 percent,” said the stats agency.
The US$ inflation rate for the period was 0, 2% gaining 0.3 percentage points on the July 2024 rate of –0.1 percent. The year-on-year inflation rate for the month of August 2024, as measured by the all-items USD Consumer Price Index (CPI), was 3.7%.
For the ZiG currency suffered harder blows during the period with month-on-month inflation rate reaching 1, 4% in August 2024, and gaining 1.5% on the July 2024 rate of -0.1 percent. This means that prices as measured by the all-items ZiG CPI, increased by an average of 1.4 between July 2024 and August 2024.
The current inflation trends come on the back of a waning parallel market exchange rate which currently maintains a mid- rate of around US$1: ZWG 18 with higher premiums being demanded depending on supply and demand factors.
There are two longstanding fundamental drivers of inflation in Zimbabwe.
The first is monetary expansion that is not supported by economic growth.
When there is more money in the economy than goods and services that can be purchased with it, its purchasing power falls and prices increase.
The second relates to what Zimbabweans now expect when it comes to inflation. Expectations are usually anchored when prices of goods and services are stable over time and consistent with what people expect to pay for them.
In Zimbabwe this is no longer the case – expectations have been de-anchored.
This happens when prices significantly differ from what people expect. If they are getting higher, this can have an inflationary effect by driving up wages and demand for goods and services.
Higher wages and demand in turn could push prices even higher, thus making inflation expectations self-fulfilling.
Zwnews
