According to data published by the national statistics agency, the monthly inflation rate in Zimbabwe moved into negative territory last month to -1.6%.
“The month-on-month inflation rate in February 2023 was -1.6% shedding 2.3 percentage points on the January rate of 0.7%,” the Zimbabwe National Statistics Agency (ZIMSTAT) stated.
In addition, annual inflation for February also fell to 92.3% from 101.5% the month before, ZIMSTAT added.
Last month’s inflation data signals the first time the country is determining the inflation rate via a weighted average based on Zimbabwe and US Dollars.
This new way of measuring inflation will mean the rate will reflect the general rise in goods and services prices gauged as a weighted average, based on the use of both Zimbabwean and US Dollars over a set time, said finance minister Mthuli Ncube.
This way to measure inflation came into effect last Friday in “Statutory Instrument 27 and Statistic (General) Notice 2023 gazetted by the finance minister,” The Herald reports.
As it stands, Zimbabwe’s economy utilises a dual currency structure made up of the Zimbabwean Dollar and the United States Dollar. The USD is currently dominant and makes up around 70% of domestic transactions.
The central bank’s 2023 Monetary Policy Statement proposed shifting to the currency-weighted consumer price index, weighting inflation rates to provide a more accurate snapshot of the real Zimbabwean economy, as opposed to depending on a single currency rate.
In addition, the country’s monthly and annual inflation has gradually fallen from peak levels of 30.7% in June last year and 285.0% in August, following the government’s tight monetary and fiscal policy stance.
The country’s central bank, the Reserve Bank of Zimbabwe, said last month that annual inflation is forecast to progressively drop to between 10% to 30% by the end of the year.
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