Measuring the pass-through effect of global food price volatility and South Africa’s CPI on the headline inflation of Zimbabwe

Figures & data

Figure 1. South Africa’s CPI and Zimbabwe imports of food and non-alcoholic beverages from South Africa (1995 to 2019).

Source: Authors compilation from data retrieved fromWB (2022b) and SARB (2022)

Figure 2. Global food price index from 1995 to 2019.

Source: Authors compilation from data retrieved from the United Nations Conference on Trade and Development (UNCTAD, 2022)

Figure 3. Zimbabwe year-on-year inflation from 1980 to 2019 (annual %).

Source: Authors compilation from data retrieved from World Data (2022)

Table 1. Composition of the CPI in Zimbabwe (1990 to 2019)

Category	Weight (Year = 100)
	1990	1996	2001	2012	2019
Food and Non-Alcoholic	29.2	33.6	31.9	33.6	31.3
Alcoholic beverages and tobacco	9.9	16	4.9	4.4	4.9
Clothing and Footwear	9.8	6.9	5.7	6.1	4.3
Rent, Fuel and Power	18.7	17.3	16.2	17.7	27.6
Furniture, Household Equipment and Maintenance	7.2	7.5	15.1	9.9	5.3
Health	2.8	1.7	1.3	2.2	1.4
Transport	8.4	6.6	9.8	9.8	8.4
Communication	-	-	1.0	3.4	2.7
Recreation and culture	2	1.2	5.8	2.1	2.3
Education	7.6	4.5	2.9	5.7	4.3
Restaurants and Hotels	-	-	1.5	1.4	11
Miscellaneous goods and services	4.4	4.7	3.9	3.9	6.5
Total	100	100	100	100	100

Notes: transport was combined with communication in the 1990 and 1996 CPI weights, while there was no restaurants and hotel category during the same periods.

Source: Adapted from the Zimbabwe National Statistics Agency (ZIMSTATS, 2019)

Table 2. Description of variables

Variables	Symbols	Description	Sources
Headline Inflation	${\pi }_t^{headline}$	The headline inflation of Zimbabwe measured by the CPI with base year 2010.	UNCTAD (2022)
Global food prices	Fpvol	Prices of food on the global market proxied by the global food price index.	WB (2022a)
Output gap	Output_gap	It is measured as the difference between actual and potential output.	Authors’ calculation
South Africa CPI	SAcpi	CPI of South Africa	UNCTAD (2022)
Real GDP	GDP	GDP at constant 2010 US$. Domestic values for GDP are converted from domestic currencies to the US$ using the 2010 official exchange rates.	WB (2022c)
Labour stock	L	Proxied by the total labour force.	WB (2022c)
Capital stock	K	Proxied by gross capital formation (current US$).	WB (2022c)

Note: CPI, Consumer Price Index; GDP, Gross Domestic Product; UNCTAD, United Nations Conference on Trade and Development; WB, World Bank; WDI, World Development Indicators

Source: Authors compilation

Table 3. Regression results of the GARCH (1, 1) model

Global Food Price Volatility	ARCH Effects
F-statistic	89.5334
	(0.0000)
Obs*R-squared	71.9429
	(0.0000)
	GARCH (1, 1)
	Mean Equation	Variance Equation
	$\omega$	${\alpha }_i$	${\beta }_i$
Coefficient	−0.0061	0.1832	0.7875
Standard error	0.0845	0.0428	0.0449
z-Statistic	−0.0725	4.2802	17.5344
	(0.9422)	(0.0000)	(0.0000)
Log likelihood	−753.3193
Durbin-Watson stat	1.4008
Akaike info criterion	4.2191
Pass through	FPvol	SAcpi
Coefficient	−5.1361	−35.2252
Standard error	2.2728	13.8816
t-Statistic	−2.2599	−2.5375
	(0.0381)	(0.0219)
$\frac{\sum _{j=0}^p{\mathrm{\Phi }}_i}{\sum _{i=1}^n{\theta }_i}$	3.3247	22.8025
Adjusted R^2	0.7262
Durbin-Watson stat	2.1205
F-statistic	5.8855
	(0.0004)

Probabilities in parentheses.

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Data availability statement

The data that support the findings of this study are available online at https://doi.org/10.6084/m9.figshare.22793570