Reserve Bank of Zimbabwe (RBZ) governor John Panonetsa Mangudya said prices of goods and services are expected to stabilise after the month-on-month inflation for the month of February fell by 1.98 percentage points from the January rate of 5.43 per cent to 3.45 per cent.
Prices of basic goods and services have been going up since December 2020 and Mangudya told The Sunday Mail that the increases were largely driven by strong demand and depressed production. He said:
The prices of some commodities such as cooking oil shot up due to increases in the price of Crude Degummed Soybean Oil (CDSO) on the international market.
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There was an increase in the prices of goods in December and January because of the festive season; there was a high demand against low productivity.
That is why we are concentrating on increasing productivity to ensure there is a balance between demand and productivity.
There was also an increase in the cost of power and fuel.
The Central Bank chief however expressed confidence that prices are going to stabilise as the anticipated bumper grain harvest will increase the availability of most basic commodities.
Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu said the coronavirus-induced lockdown had affected manufacturing and the government should consider availing a stimulus package for manufacturers for them to increase production.
Economist Gift Mugano concurred that the national lockdown negatively impacted production. He said manufacturing and movement in goods are expected to improve once the lockdown is eased.