Zimbabwe’s monthly inflation back into negative territory in February

By Xinhua

HARARE: Zimbabwe’s monthly inflation rate receded into negative territory in February to -1.6 percent, the first time in as many years following the implementation of a tight monetary and fiscal stance by the authorities, according to data released by the national statistics agency Friday.

“The month-on-month inflation rate in February 2023 was -1.6 percent shedding 2.3 percentage points on the January rate of 0.7 percent,” the Zimbabwe National Statistics Agency (ZIMSTAT) said.

Annual inflation for February also declined to 92.3 percent from 101.5 percent the previous month, the ZIMSTAT said.

The February inflation data marks the first time that Zimbabwe is now computing the inflation rate using a weighted average based on the use of Zimbabwean dollars and United States dollars after Finance Minister Mthuli Ncube on Friday gazetted a statutory instrument enforcing the new measure.

The new method of measuring inflation will be such that the rate of inflation will reflect the general increase in price levels of goods and services measured as a weighted average based on the use of Zimbabwean dollars and U.S. dollars over a given period of time, Ncube said.

Zimbabwe’s economy has a dual currency structure composed of the Zimbabwean dollar and the U.S. dollar, with the use of the U.S. dollar currently dominant and constituting about 70 percent of domestic transactions.

Zimbabwe’s monthly and annual inflation has progressively declined from peak levels of 30.7 percent in June and 285.0 percent in August last year, respectively, following a tight monetary and fiscal policy stance by the government.

The Reserve Bank of Zimbabwe, the country’s central bank, said last month that annual inflation is expected to decline progressively to between 10-30 percent by year-end.