The figures came two days after Minister of Finance Tendai Biti forecast annualised inflation to close at 4,5% this year.
“The month-on-month inflation rate (monthly percentage change) in June 2010 was -0,1%, shedding 0,4 percentage points from May 2010 rate of 0,3%,” the CSO said.
This means that prices as measured by the all-items Consumer Price Index (CPI) decreased by an average of 0,1% from May to June 2010.
CSO said month-on-month food and non-alcoholic beverages inflation stood at -06,1% in June, shedding 1,18% percentage points on the May 2010 rate of 0,57%.
“The month-on-month non-food inflation stood at 0,12%, shedding 0,01 percentage points on May 2010 rate of 0,13%,” said the CSO.
The CPI for the month ending June 2010 stood at 95,2% compared to 95,3% in May 2010 and 90,4% in June last year.
Inflationary pressures in the country picked up during the first half of 2010 with year-on-year inflation recording 0,7% in January, 1% in February, 3,5% in March, 4,8% in April 2010 and 6,1% in May.
Presenting the 2010 mid-term monetary policy on Wednesday, Biti said the upward movement in prices of basic commodities reflected wage increases awarded during the first quarter of the year, which he said had increased unit costs of domestic production.
“Tariff adjustments for public utilities, as well as the strengthening of the South African rand against the US dollar also contributed to the price increases. During the second quarter of the year, the exchange rate between the rand and the US dollar had stabilised,” Biti said.
Biti said government’s failure to put a tight lid on the resurgence of domestic inflation would only serve to reduce the competitiveness of local goods in both the domestic and export markets.
“The impact on our already income-constrained consumers would be further resort to lower priced imported products, with adverse consequences for local production and employment,” he said.
Biti said inflation, which had declined in 2009 to marginal levels in developed economies and to around 5% in emerging economies, is projected to rise respectively to around 1,5% and 6% in 2010.
Economists see inflation declining in 2011.