(Last Updated on November 5, 2021 by ZIMDAILY EDITOR)
HARARE – Zimbabwe’s annual inflation will likely end the year between 55% and 65% against a government forecast of 53%, due to volatility of the parallel market exchange rate, researchers at Inter Horizon (IH) Securities have said.
Finance and Economic Development minister Mthuli Ncube recently revised annual inflation targets to between 35% and 46%, saying pressures from rocketing international food and oil prices were beginning to seep into the domestic market.
Government had previously projected between 25% and 35%.
Panicky authorities have been reshuffling targets in the past few months in response to volatilities that have shaken the economy, including an extensive battering of the domestic unit.
However, in its October monthly snapshot, IH said annual inflation would end the year between 55% to 65%.
“Month-on-month inflation has been on a steady increase since August. Should the current trend continue, annual inflation will end the year around 55-65% against a government forecast of 53%,” the research paper read in part.
“The rising inflation levels have been attributed to volatility of the parallel exchange rate. In recent weeks there has been strong demand for foreign currency on the auction as well, possibly indicative of a growing economy and, therefore, activity in industry,” the researchers said.
Meanwhile, the Reserve Bank of Zimbabwe claims that Zimbabwe’s forex inflows will hit record high since 2010, spurred by mineral exports and diaspora remittances, the Reserve Bank of Zimbabwe (RBZ)said.
As of October 2021, the country had recorded a total of US$7,2 billion in foreign currency receipts, resulting in a positive current account balance of around $1,7 billion. Export earnings increased by 54,5 percent to US$4,5 billion for the period January to mid-October, compared to US$2,9 billion realised in 2020, the central bank said.
Mining exports generate about 85 percent of Zimbabwe’s foreign currency earnings.
International remittances, encompassing diaspora inflows and non-Governmental organisations, funds jumped to US$1,7 billion from US$1,1 billion,” RBZ said.
Loan proceeds rose to US$728 million from US$673 million.