Bizarrely, despite the increase in prices, the Zimbabwe National Statistics Agency on Tuesday reported that the year-on-year inflation rate last month as measured by all items stood at 457,19% from peak of 785,5% in May.
“Inflation is expected to gradually decline in the second half of 2020, from the peak of 785,5% in May 2020, to 300% in December 2020, responding to current monetary and fiscal policy interventions,” Ncube said.
“The projected annual inflation is consistent with reducing the month-on-month inflation from 31,7% in June 2020 to around 5% in the last quarter of 2020.”
However, reducing inflation will be difficult as that would require foreign currency to stabilise the local currency which, in turn, would slow the depreciation of the local currency and thus lower inflationary pressures.
Ncube said as at May 31, 2020, the total foreign currency inflows amounted to US$2,35 billion against foreign payments of US$1,55 billion, with most of the monies going to imports.
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