Zimbabwe Inflation Rises to 4,29%

Zimbabwe National Statistics Agency (ZImStats) shows that Zimbabwe's annual inflation rate rose from 1.38% to 4.29% in July.

It was a significant upturn from the June 2018 figure of 2.9%, on a monthly basis, the inflation rose 1.03% to 0.98%.

The monthly update of ZimStats said, "The month-on-month inflation rate in July 2018 was 0.98% percent gaining 1.03% points on the June 2018 rate of -0.05%".

Some people have attributed the quickening inflation to the continuance of the parallel currency market. Zimbabwe uses a basket of currencies dominated by the US dollar, as well as financial instruments – “the bond notes”, which are guaranteed by an international financial organization.

Reserve Bank of Zimbabwe (RBZ) has maintained the US dollar-bond note official rate at 1:1, cash shortages have resulted in a thriving black market for physical currency, both bond notes and United States dollar notes.

And it is largely expected that the high demand for US dollars by both companies and individuals continues to push up the exchange rate.

"Under multi-currency, Zimbabwe's inflation can rise to 4.6% without necessarily hurting economic growth. Beyond 4.6%, however, inflation will contribute negatively to growth".