Blended CPI inflation is still battling for acceptance by the Zimbabwean public. However, ZimStat has forged on publishing it as they were compelled to by statutory instrument. Credit to the team at ZimStat for making historical data for blended CPI inflation available, as we can now compare current inflation to historical figures. April saw a slowdown in year-on-year inflation to 75.2%.  Month-on-month inflation increased to 2.4%. The bigger story is the rapid depreciation of the Zimbabwean dollar in the last few weeks.

Year on Year

Year-on-year inflation continued the decline. This time dropping from 87.6% to 75.2%. We are certainly in times of decline. Blended CPI inflation showed a 12-month high of 108.7% in October 2022. Zimbabwean dollar CPI inflation’s 12-month high was 285% in August 2022. This gives us some perspective.

Zimbabwe year on year inflation April 2023

Month on month

However, month-on-month blended CPI inflation increased significantly. From 0.1% to 2.4% is not something to sneeze. This coupled with the fact that it was -1.6% in February. An interesting disconnect between the year-on-year and month-on-month inflation, but this is more consistent with the picture on the ground which will discuss shortly.

Zimbabwe month on month inflation April 2023

2008 memories ignited

In recent weeks those who have memories of 2008 and hyperinflation in Zimbabwe had them activated. Those who do not have memories of 2008 got a taste of it. The Zimbabwean dollar had one of the worst experiences on the parallel market since it was reintroduced. And pricing in shops responded commensurately. With a US dollar commanding around 2000 Zimbabwean dollars. The picture clearly shows everyone that the Zimbabwean dollar has seen better days.

Zimbabwe exchange rate April 2023

It has been proven repeatedly that the Zimbabwean dollar problem is money supply growth. Many will cite the lack of confidence in the issuing authority, but the lack of confidence is an effect. Unjustified money supply growth is the cause. The timing of the switch from Zimbabwean dollar CPI to Blended CPI is all the more suspicious with recent events. In particular, the effective abolition of Zimbabwean dollar CPI. It is reasonable to say this time of year always brings about depreciation in the Zimbabwean dollar.

This is where the weakness of Blended CPI inflation is exposed. For the individual user of information. If you earn in Zimbabwean dollars, you will see a different picture. If you earn less than 70% of your income in US dollars, blended CPI does not speak for you.