HomeBusinessUnder-fire ZimStat chief hints at reforms

Under-fire ZimStat chief hints at reforms


THE Zimbabwe National Statistics Agency (ZimStat) will soon start producing demand-driven statistics to bolster informed policy formulation and decision-making processes, according to director-general Taguma Mahonde.

The data chief, who has been under fire to explain inflation data and pricing trends in Zimbabwe, said the decision to bring in a demand-driven statistics service was part of the agency’s modernisation strategy.

In a paper titled: Demystifying Inflation Deceleration, Mahonde said the statistical field was transforming and new trends were emerging, indicating that there had been a surge in demand for regular updates.

“ZimStat remains committed to its modernisation agenda, which is replacing paper-based interviewing with computer-assisted interviewing. This is envisaged to produce timely, reliable and accurate statistics in this era of increasing demand for high-frequency data,” Mahonde said.

“More emphasis will be on producing demand-driven statistics for informed policy formulation and decision-making processes.”

He said an inflation slowdown did not mean a decrease in the price of goods and services.

Zimbabweans had queried why prices were rising when ZimStat data showed a slowdown in inflation.

“In order to demystify the seemingly contradicting scenario of declining rates of inflation and increasing prices, as reflected in our published inflation statistics, I will use an example of another rate whose characteristics are more familiar to consumers,” Mahonde said.

“This rate is speed as measured in kilometres per hour.

“Speed takes stock of change in distance over time; likewise, inflation rate takes stock of the pace at which the general price level of goods and services changes over time.

“Thus, inflation could be taken as a moving object, that at one time was moving at 837,5km per hour (read 837,5% year-on-year (y-o-y) inflation rate for July 2020).

“A braking system is then applied to this moving object (read monetary and fiscal policies that retard inflation), and the object decelerates from 837,5km per hour to 194,1km per hour (194,1% being the y-o-y rate of inflation for April 2021).”

Although the speed of 194,1km/hr shows deceleration from 837,5km per hour, Mahonde said the object will still be moving at high speed.

“The same goes for the y-o-y inflation rates which are decreasing while prices are increasing,” he added.

“This development is termed inflation deceleration, or is referred to as inflation increasing at a decreasing rate, which should not be mistaken with a decrease in the price of goods and services.”

Internationally, Mahonde said the recommended y-o-y inflation rate that stabilises an economy is single-digit, that is, between 0 and 10%.

For the general price levels to fall, Mahonde said the object would need to engage in reverse gear and start moving backwards.

This scenario of moving backwards would represent deflation, he added.

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