Inflation To Fall By Mid-year – Economic Commentator

Economic commentators reckon that month on month inflation will go down by mid-year due to low demand.

Prices of goods and services continue to skyrocket caused mainly by a rapid fall in the value of the local currency against the United States dollar on the black market.

However, salaries have remained stagnant, reducing the buying power of ordinary citizens.

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Africa Economic Development Studies (AEDS) executive director Gift Mugano said that business is pricing itself out of the market. He said:

Inflation is going to go down because of decline on the demand side, products are being priced using inflated exchange rate (and) by that business is placing itself out of the market because customers are out of money.

We are already seeing indications of slow demand. By mid-year there should be negative month on month inflation because people will not be buying, businesses can’t continue to raise prices because the salaries have not gone up.

Beverages manufacturer Delta Corporation last week reduced the price of coke and other carbonated drinks, which could be an indication that businesses could become averse to increasing prices willy nilly.

More: The Herald

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