Macroeconomic Forecast Zimbabwe

BMI View: Inflation in Zimbabwe increased to 6.1% y-o-y in May, up from 4.8% in April. Despite the move higher in the year-on-year number, month-on-month headline price growth remained relatively benign at 0.3%. We believe that a combination of limited liquidity and subdued domestic demand will help to keep a lid on prices and we expect to see year-on-year inflation at 7.7% at the end of 2010. That said, upside risks to our inflation outlook do exist in the form of supply-side shocks.

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