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Living with inflation: Life in Zimbabwe gets tougher
Fanuel Jongwe, Agence France-Presse (AFP)
June 12, 2006

http://www.reliefweb.int/rw/RWB.NSF/db900SID/SODA-6QP3MG?OpenDocument&rc=1&cc=zwe

HARARE - Inflation in Zimbabwe has skyrocketed to nearly 1,200 percent, an economic phenomenon set to bring further misery to people grappling with acute food and fuel shortages, high unemployment and abysmal poverty.

The country's statistical office Friday said that 12-month inflation in May had soared to 1,193.5 percent and that prices were on an average 13 times costlier than in the same month of 2005.

"The year-on-year rate of inflation in May 2006 was 1,193.5 percent, gaining 150.6 percentage points on the April rate of 1,042.9 percent," said Moffat Nyoni, acting director of the Central Statistical Office (CSO).

"This means that on average, goods and services normally purchased by households for final use in Zimbabwe were about 13 times as expensive in May 2006 as they had been 12 months before," he said.

Zimbabwe's inflation rate crossed the 1,000-percent threshold to reach a world-record high of 1,042.9 percent in April.

It set off a spate of price increases. The cost of bread went up by more than 50 percent to 130,000 Zimbabwean dollars (1.2 US dollars) while public transport fares doubled.

At the start of this month, the central bank issued a new 100,000-dollar banknote four months after unveiling another currency denomination.

Economic analysts said central bank targets to slash inflation to below 500 percent in June and double digits next year were nearly impossible.

"Those who speak in parables and say inflation will just go down without fundamental policy changes are propagandists," analyst Daniel Ndhlela told AFP.

"Inflation will continue to rise until the government addresses the factors driving it, which are lack of foreign investment, the printing of money by the central bank and the fixed exchange rate which is fuelling a parallel foreign currency market."

Economic analyst Eric Bloch said inflation would not start decelerating in June as projected.

"In the meanwhile, for the low-income earners, the economic hardships will continue," he said.

Zimbabwe's main opposition leader Morgan Tsvangirai said: "You wonder how a Zimbabwean is surviving every day on less than one US dollar in this kind of inflation."

Ordinary workers bearing the brunt of the economic recession resort to skipping meals, walking or cycling long distances to work as they battle to stretch their wages to the next pay day.

Munyaradzi Rusike, who works at a food outlet in central Harare, said it was impossible to plan a family budget.

"If you forget to buy something in a shop in the morning and return in the afternoon, there is a good chance that you will find the price doubled."

The Consumer Council of Zimbabwe last week said the cost of living for a family of six rose 19.5 percent from 41 million dollars in April to 49.1 million dollars in May, pointing out that the average worker earned less than 20 million dollars.

The country's main labour body, The Zimbabwe Congress of Trade Unions warned in May that it was planning mass strikes to demand higher wages to cushion workers against rising living costs.

Zimbabwe is in the seventh consecutive year of economic recession characterised by high inflation, unemployment, chronic shortages of basic goods like sugar and cooking while more than 80 percent of the 13 million population is living below the poverty threshhold, according to economic analysts.

The government often blames the country's woes on sanctions imposed against President Robert Mugabe and members of his inner circle by the United States and the European Union.

But critics say the recession was sparked by controversial land reforms under which the state seized land from white farmers for redistribution to landless -- and often unskilled -- blacks, thereby wreaking havoc on the key agriculture sector.

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