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Zimbabwe
inflation shoots up again
Dumisani
Muleya, Business Day (SA)
November
11, 2005
http://www.businessday.co.za/articles/world.aspx?ID=BD4A111623
ZIMBABWE’s triple-digit
inflation shot up to 411% year on year last month — dealing an embarrassing
blow to the central bank’s target of reducing it to about 300% by
year-end, according to official figures released yesterday.
The continued
rise in inflation heralded a further deepening economic crisis in
Zimbabwe.
The country
is beset by foreign currency shortages, which in turn have caused
the scarcity of fuel, power, drugs, spares, production inputs and
basic commodities.
Zimbabwe resumed
negotiations for a $500m loan from SA to pay for imports and settle
debts.
Finance Minister
Herbert Murerwa and central bank governor Gideon Gono travelled
to Pretoria for talks twice in the past two weeks.
Negotiations
have been stalled by conditions of political and economic reform
tied to the loan.
The International
Monetary Fund (IMF) has said Zimbabwe’s economy will shrink 7% this
year, after a 4% contraction last year and 10,5% in 2003. The central
bank claimed the economy would grow between 2% and 2,5%.
The IMF had
said inflation would rise above 400% next month.
After the recent
adjustment of the official exchange rate from Z$26000 against the
US dollar, to Z$60000, inflation looks set to increase massively
next month.
However, Gono
has put his inflation projection for next month at 280%-300%.
The Central
Statistics Office said the October annual rate of inflation was
411%, an increase of 51,2 percentage points from September’s rate
of 359,8%.
"This means
that on average goods and services purchased by households for final
use in Zimbabwe were 5,11 times as expensive in October 2005 as
they had been 12 months before."
Year-on-year
inflation accelerated from 265% in August to 359% in September.
Nonfood inflation
was 414,7%, an increase of 23,3 percentage points on September’s
391,4%, while food and monthly nonalcoholic beverages inflation
was 407,5%, up 99,3 percentage points.
On a year-on-year
basis, the items that recorded the highest increases in prices were
bicycles, postal services and hair dressing saloons. On a month-on-month
basis, regional airfares, electricity charges and railway fares
recorded the highest increases.
US ambassador
to Harare Christopher Dell said last week that the Zimbabwean economy
had been ruined by "gross mismanagement and corrupt rule",
contrary to official claims that it was undermined by drought and
targeted western sanctions.
Dell was summoned
over his remarks and given a final warning on Wednesday to desist
from criticising President Robert Mugabe’s regime or face expulsion.
Dell left for Washington yesterday to consult his government over
the issue.
The state press
said he had been reprimanded by the government for his outspoken
comments.
While the government
might have succeeded in temporarily silencing Dell, the situation
on the ground resembled his pointed remarks, the sharpest yet made
by a foreign envoy on Zimbabwean soil.
Meanwhile, Mugabe
this week attended the Commonwealth’s 2005 Smart Partnership Dialogue
meeting in Maseru, despite Zimbabwe’s suspension.
The aim of the
meeting was to form partnerships between developing countries.
It is an annual
event that is convened by the Commonwealth Partnership for Technology
Management. With Sapa-AFP
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