Zimbabwe’s limping economy has entered into deflation with official figures released by Zimbabwe National Statistics Agency (Zimstat) for March showing consumers prices declined by 0.91 percent having gone down by 0.49 percent in February.
“This means that prices as measured by the all items Consumer Price Index decreased by an average of 0.91 percentage points between March 2013 and March 2014,” Zimstat said.
Monthly inflation rate for March slid into deflation, standing at -0.22 percent after dropping 0.27 percent on the February rate of 0.05 percent.
Apart from low aggregate demand, analysts have also attributed the deflation to the weakening of the South African Rand against the United States dollar which is the currency of reference in Zimbabwe.
South Africa is Zimbabwe’s major trading partner, accounting for about 60 percent of Zimbabwe’s imports. The analysts have since called for urgent and practical intervention measures s to boost economic activity in the country so as to spur national demand for goods and services.
Zimbabwe has struggled to resuscitate in industrial base to boost local production and exports leading to a deluge of consumer goods imports.