Business bullish, falling inflation to drive growth





Business operators are confident sustained deceleration of inflation and growing exchange rate stability would be key for business confidence and better growth opportunities, going forward.

This comes as the Reserve Bank of Zimbabwe (RBZ) has reiterated the economy has potential to maintain the current low inflation trend and exchange rate stability, despite slightly revising up year-end inflation projections.

Inflationary pressures in the economy have dissipated, thus, creating a conducive monetary and financial environment essential to supporting the envisaged growth of 7,8 percent in 2021 and a robust economic growth in the medium term,” said RBZ Governor, Dr John Mangudya, in a recent Monetary Policy Statement (MPS).

He said the deviation from the initial end period forecast of just below 10 percent was due to unavoidable shocks to international food and administered prices.

As a result, annual inflation is now expected to fall between 25 and 35 percent by end December 2021.

Zimbabwe Stock Exchange (ZSE) listed companies, which published their quarterly performance reports all agreed that the inflation slow down and strengthening exchange rate stability had potential to drive growth and profitability.

Inflationary pressures significantly reduced during the quarter under review leading to relative price stability in the consumer markets,” Starafrica Corporation said in its quarterly report to June 30, 2021.

The group forecasts sustained improvement of major macroeconomic fundamentals into the next quarter and beyond as the trading environment becomes more favourable to both industry and consumers alike.