Almot Maqolo, Staff Writer 
FINANCIAL experts in Zimbabwe have expressed optimism that the reporting of three sets of inflation will bolster confidence, noting that the blended consumer price index (CPI) had proven too complex for standard accounting conventions.
This comes after significant lobbying by business and economic agents to abandon the blended inflation rates.
They argued that it would be more beneficial to publish a pure Zim dollar and US dollar inflation Consumer Price Index for standard index movement comparisons. Last year, the Zimbabwe National Statistics Agency (Zimstat), switched to a blended CPI, abandoning a ZWL CPI that had served as the official baseline since 2019.
However, starting this month, Zimstat will publish three price indices: the ZiG index, US dollar index, and the blended index.
Analysts who spoke to The Financial Gazette expressed positivity, suggesting that the move should have been implemented earlier to avoid discomforting distortion. The Zimbabwe National Chamber of Commerce’s chief executive, Chris Mugaga, believes that there is no need for a blended index given the currency dynamics in the country.
Zimbabwe National Chamber of Commerce, Chris Mugaga,
“The ZiG index, I think, can also be used to determine whether the currency has been successful or not; we certainly need that. The performance and strength of the ZiG will be measured on the basis of both the inflation trend and the exchange rate movements.” Economic analyst Tinashe Kaduwo concurred with Mugaga, saying that this is what businesses have been calling for all along.
“We actually had our own way of calculating the ZWL index, US dollar index because there is no way they could come up with the blended inflation index without those two.
“It’s a positive move for the market and it’s the right step towards transparency, a key component in building confidence. “Those three key indices will help us track the traction of the ZiG in the market. Consistency in terms of methodology is therefore of great importance for economic agents to make meaning of those numbers,” Kaduwo said.
For economist Prosper Chitambara, the decision is “very good”, not just for businesses but even for workers. This comes as most workers are paid in both ZiG and the US dollar. “A lot of businesses collect part of their revenue in both ZiG and US dollars and still report in ZiG. So having ZiG inflationary numbers definitely helps in terms of planning.
“It is very important, even for banks, to be able to determine an interest rate for both ZiG and US dollar loans. They would need even separate inflation rates for ZiG and the US dollar and then, of course, for workers in terms of collective bargaining,” he said.
Renowned economist Eddie Cross thinks the separation of inflation numbers “will have little or no influence” in terms of reflecting economic trends.
Economist Dawie Roodt said the inflation rate was important because it gives us an idea of the difference between US dollar inflation and the ZiG inflation. Economist Trust Chikohora stressed that the situation is similar to when the country was using ZWL. “I don’t think there would be much difference,” he said.
