Zim inflation rate drops below 0%

Six years after hyper inflation, new figures show the country is now in deflation.

Zimbabwe's rate of annual inflation is now below zero percent for the first time in six years. Picture: Wikimedia Commons.

HARARE - Six years after hyperinflation spiralled out of control in Zimbabwe, new figures show the country has for the first time dipped into deflation, meaning its rate of annual inflation is now below zero percent.

Economists say the trend is fuelled by the high rate of unemployment and the decline in consumer spending power but inflation may well pick up again soon.

According to Zimbabwe's statistical agency, the inflation for February was minus 0.49 percent, down from just below half a percent in January.

Bulawayo based economist Eric Bloch told Eyewitness News there's been a massive decline in spending power in the post-Christmas period and shops have been dropping their prices to try to sell some goods.

The deflation trend is new to Zimbabwe, which made the history books when inflation reached an official 231 million percent in 2008.

But Bloch says he expects moderate inflation to pick up again within the next two months.

The economist said he predicts the country's annual inflation rate will reach around four percent this year.