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Zimbabwe’s slower inflation may be the calm before the storm

By David Whitehouse
Posted on Wednesday, 17 March 2021 10:09

Zimbabwe Virus Outbreak
A young boy sits in a queue for cooking gas in Harare, Zimbabwe, Sunday, March, 29, 2020. (AP/Tsvangirayi Mukwazhi)

Zimbabwe’s inflation slowdown in February may reflect the impact of COVID-19 restrictions imposed in January rather than a genuine downward trend. But prospects of a good harvest and improving confidence from business leaders points to relief down the road.

The overall annual February figure of 322% was a decline of 41 points from 363% in January. Monthly food inflation fell to 4% in February versus 8% in January, after reaching a peak of 38% in 2020. Zimbabwe entered a level four lockdown on 6 January, which ran until mid-February before restrictions were eased. The central bank expects overall annual inflation to drop to below 10% at the end of 2021.