Beene Hachoombwa
Beene Hachoombwa

WHAT DOES IT MEAN WHEN INFLATION RATE DECREASES????

INFLATION HITS 9.7% AS OF JUNE.………………………………………………………………………

Beene Hachoombwa
DBA,BBA,MBA-business and Strategy

01.07.2022.
✍🏾 As predicted it was important that we get to single digit inflation rate and here we at at 9.7% from the over 24% inflation rate gotten from the last years of the previous government.

✍🏾This a tremendous reduction from 24% in August 2021. The downside is the increase in interest rates due to tight liquidity in line with the monetary policy central bank is implementing. This means that money is mopped out to match with the quantity of goods that can be bought.


✍🏾As the inflation rate continues to decrease, it will be helping in the achievement of macroeconomic objectives as set out in the 2022 budget.


✍🏾Prices of goods may not decrease automatically due to production and inventory lags that economies experience. What this means is stock bought at the old price still have to be sold at an economic profit.


✍🏾Automatically, other economic variables such as exchange rates are responding accordingly with the stability of decrease critical to an import oriented country like Zambia.

BH

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