Market watchers have raised fears that the country might be affected by imported inflation following the tumbling of the U.S dollar against major currencies.The countryâ€™s economy is faced with an imported inflation following the USâ€™s economic slump which has resulted in the greenback facing a heavy knock against major currencies including the South African Rand.
Economic analyst, Mr. Danny Musukuma highlighted that while the country has no direct control over the performance of the greenback, there is need to deal with the price distortions on the market and the negative balance of payments by boosting the supply side of the economy.
Apart from the slump of the US dollar, market watchers also believe that the recent increase in power tariffs, reinstatement of duty on basic commodities and the impending rise in fuel prices on the global market may further push the countryâ€™s inflation rate to over 6% by year-end.
Another economic analyst, Mr. Chris Mugaga believes fiscal authorities need to support the productive sectors and create a favourable economic environment for foreign direct investments in order to mitigate the effects of the inflationary pressures.
Meanwhile, world stock markets have been on a dip after US released the worst employment report on Friday last week raising fears that the world’s largest economy is heading back into recession.
The negative job report comes on top of Europe’s ongoing debt problems.