October inflation slides further into negative territory at -3,92 percent


RBZ-Governor John Mangudya and Finance Minister Patrick Chinamasa

ZIMBABWE’S annual inflation continued its slide into the negative after shedding 0,18 percentage points to -3,29 percent in October from -3,11 percent in September.

Annual inflation has remained in negative territory since November 2014 due to the continued weakening of the South African rand, low aggregate demand and to an extent price correction on certain products which has put into spotlight the debate about good deflation versus
bad deflation.

Analysts say that if the rand weakens further, Zimbabwe’s inflation rate will hit -5-6 percent in the first half of 2016.

The year on year Food and Non Alcoholic beverages inflation prone to transitory shocks stood at-4,00 percent. The majority of food subcategories recorded declines in October with the largest being in milk, cheese and eggs (following the glut in the market from the main producers), fish and sea food.

Retailers continue to suffer the most from the current deflationary pressures with OK Zimbabwe last week saying that its revenue performance had been affected by the current economic situation which has seen retailers continue to use price cuts and promotions to stimulate sales.

With many food retailers now using price cuts to attract sales, this is lowering the cost of the monthly basket and so the overall food inflation figure. Deflation and price led competition will continue to
be a key driver of sales growth for some time yet, according to analysts.

The Non-food inflation rate was-2,95 percent.
The month on month inflation rate in October2015 was -0,29 percent gaining 0,07 percentage points on the September 2015 rate of -0,36 percent.

The month on month Food and Non Alcoholic Beverages inflation rate stood at-0.53percent in October 2015, shedding0.06 percentage points on the September 2015rate of -0.47 percent.

The month on month non-food inflation rate stood at-0.17percent, gaining 0.14percentage
points on the September 2015 rate of-0,31 percent. FinX

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