At 175 percent, Zimbabwe faces new acute inflation
A report by Al Jazeera monitored by Daily Times of Nigeria said annualized inflation in Zimbabwe surged to 175.66 percent in June, up from 97.85 percent in May, the country’s statistical office said Monday.
The situation, the report said, indicates that Zimbabwe may face new bout of inflation similar to what the country faced a few years ago when its leaders decided to abandon its national currency.
On a monthly basis, consumer prices rose 39.9 percent in June compared with 12.54 percent in May. Hyperinflation occurs when prices rise 50 percent per month.
Monday’s price data was also troubling because Zimstat, Zimbabwe’s national statistics agency, said that it had not changed its formula in March for measuring inflation, the June reading based on the old formula would technically have landed the country in hyperinflation territory.
Beyond formulas, prices of goods are rising so fast that the official data may not be capturing just how troubled the situation is becoming.
“The June figure of 175.66 percent could still be lower than the actual price hikes experienced in the market where prices for most fast-moving consumer goods doubled more than twice,” said Harare-based independent economist Victor Bhoroma.
Bhoroma was reported to have told Al Jazeera that he predicts inflation will be above 200 percent by the end of the year, fed by several factors: price hikes for essentials such as fuel and electricity, salary increases for civil servants, the issuing of more government debt, and the minting of new Zimbabwean notes and coins
“I think prices are not going to be rising as fast after September,” he told Al Jazeera.” The exchange rate should remain at current levels for the next couple of months.
But there is still a risk [that] demand for forex [foreign exchange] may increase against limited supplies. If that happens, then the exchange rate may actually weaken against the US dollar.”
