While the big highlight on Thursday 25th November was definitely the announcement of the 2022 budget, interest would also have been placed on the monthly announcement of CPI and inflation figures by ZimStat. No surprises from ZimStat as year-on-year inflation registered its 3rd straight month of increase from 54.49% to 58.4%. Month on month inflation contrasted with a decline from its year high of 6.4% to 5.8%. With the minister announcing a year-end target of 52 to 58%, barring a miracle even the revised target will be missed.
Year on year
After successfully significantly slowing the growth of year on year inflation and bringing it down from around 800% to just over 50% in June 2021 we have had 3 consecutive months of acceleration in the inflation rate. What should be of concern is the increasing rate of acceleration. Increases of 1.31% in September, 2.94% in October and 3.91% in November show a clear pattern. As our regular graph from Trading Economics shows the increment while smaller than what we are used to is visible.
Month on month
The month on month picture presents some positive reading with a reduction from 6.4% to 5.8%. This is welcome as it breaks the pattern of increment that was recorded over the past 3 months. While 5.8% is well over the average for the year thus far any relief is welcome. The data suggest that Zimbabweans should probably prepare for higher month on month inflation figures to close 2021 and open 2022.
The ZimStat infographic below shows the contribution to month-on-month inflation by the different segments of the Consumer Price Index basket. Food and non-alcoholic beverages (6.51%), Restaurants and hotels (10.88%) and communication (9.37%) all pulled the basket up significantly.
Target will almost certainly be missed
Just yesterday while presenting the 2022 National budget finance Minister Professor Mthuli Ncube confirmed a second revision of the year-end inflation target from 25-35% up to between 52 and 58%. With year on year, inflation at 58.4% for November it would take negative inflation growth (deflation) to meet the target in a month’s time.