Analysts say the reduction in year on year inflation from more than 700 percent to around 400 is testimony of the success of fiscal economic interventions.
Zimbabwe’s inflation figures were the highest in the world, with year on year figures hovering around 780 percent as of May this year just before fiscal and monetary authorities came up with a raft of measures to stabilise the economy.
The downward spiral of year on year figures to just below 400 percent as of September has impressed economic experts, with Equities Analyst, Batanai Matsika acknowledging the positive impact of fiscal interventions.
“You have people who just looked at the exchange rate and the next day they adjust prices because it had become the norm to increase prices based on anticipated future exchange rate movements.”
Economist, Mr Collen Jonasi says government has been vindicated with price stability even manifesting in negative month on month inflation.
“Price stability witnessed in inflation figures signals a new chapter in Zimbabwe’s economic stabilisation efforts.”
The coming of the auction system was also instrumental in bringing an end to the manipulation of the exchange rate.
“There is a formal system for trading foreign currency which means speculators have been muted in manipulating the exchange rate,” said Persistence Gwanyanya, an economist.
The downward spiral of year on year inflation speaks volumes on the success of the Transitional Stabilisation Programme, hence expectations that the National Development Strategy which comes into effect next year will provide further impetus for economic growth. – ZBC
