The Observer - 23 March 2014 - 3
Govt powerless to stop deflation
W
Jason Moyo
ith no stimulus or currency
measures at hand, the Zimbabwean
government can do little but watch
the downward spiral.
After enduring years of
world-record
hyperinflation, Zimbabwe’s economy has swung to
the other extreme: deflation. The country’s inflation
rate has now fallen below zero, slipping into a new era
that economists say makes the already dim recovery
¬prospects even worse.
Annual inflation in February fell into negative
territory for the first time, coming in at -0.49% from
0.41% in January, according to ZimStat, the national
statistics agency. Whereas inflation shows the rate
of price increases, deflation reflects that prices are
falling.
Although this may seem like a goo