Bloomberg News

Zimbabwe Inflationary Pressures to Remain High, Interfin Says

October 19, 2011

Oct. 19 (Bloomberg) -- Zimbabwe’s inflationary pressures in the fourth quarter will likely remain high because of rate rises and the ongoing import of most commodities, Interfin Securities said.

A 31 percent rise in the electricity tariff by power company Zesa Holdings Pvt Ltd. will add to inflation as companies try to pass on the higher rate to consumers, Interfin said in an e-mailed research note.

“We still maintain that the 4.5 percent inflation target by the Ministry of Finance is likely to be missed,” Interfin said.

Annual inflation is running at 4.3 percent, up from 3.5 percent in August, according to Interfin. The current account and budget deficits are likely to rise “until new measures are put in place to curb rising government expenditure, especially consumptive expenditure, which has come at the expense of capital expenditure,” the company said.

--Editors: James Kraus, Peter Branton

To contact the reporter on this story: Godfrey Marawanyika in Johannesburg at gmarawanyika@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net


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