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Zimbabwe: Industry Says Reserve Bank 70% Inflation Target Realistic

THE Confederation of Zimbabwe Industries (CZI) says the attainment of between 60-70% inflation targets set by the monetary authorities is realistic and achievable.

The remarks come shortly after the Reserve Bank of Zimbabwe (RBZ) reversed its projection on annual inflation in its Mid-term Monetary Policy Statement (MPS) from 10%-30% end of the year to 60%-70% end of year 2023.

Commenting on the latest development, the CZI’s latest report on inflationary trends described the target as achievable.

“The current inflation projections are more realistic, and they can be achieved if the authorities stay the course. History has shown that policy indiscipline in terms of money printing, liquidity management and fiscal spending can lead to high inflation,” the report said.

The industry organ also revealed that food manufacturers slashed prices by more than 23% in July 2023 compared to June 2023 demonstrating a direct response to positive policy impact as opposed to the belief that companies have an insatiable appetite to profiteer.

The trend of reducing prices was evident across all sub-sectors, albeit in different magnitudes.

The lobby group believes that the acute shortages of the local currency added to the availability of foreign currency on the official market and led to the significant reduction of reliance on the parallel market when sourcing for US$.

CZI hailed economic measures implemented by the government towards the end of 2023 for going a long way to ease inflation.

“What is of paramount importance now is exchange rate stability rooted in the convergence of the parallel market and the official rate, which would give an assurance of sustainable stability.

“If there is no sudden injection of liquidity into the market, the month-on-month inflation figures for September 2023 will likely continue to be in negative territory,” the lobby group said.

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