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Inflation in Zimbabwe surges to record 3,714 percent, the highest in the world
Angus Shaw, Associated Press
May 17, 2007

http://www.iht.com/articles/ap/2007/05/17/business/AF-FIN-ECO-Zimbabwe-Inflation.php

HARARE, Zimbabwe (AP) - Zimbabwe's annual inflation rate surged to an unprecedented 3,714 percent at the end of April, the official state newspaper reported Thursday, as the government set up a commission to try to bring prices down to single digit levels.

Prices more than doubled last month as shown by a 100.7 percent increase - the highest on record - in the consumer price index calculated by the state Central Statistical Office, the Herald newspaper said. In the past year they increased 36-fold.

The Herald said that President Robert Mugabe on Monday signed into law regulations to enforce wage and price controls through "comprehensive price surveys and inspections," with a penalty of up to five years in jail for violators. The ultimate aim would be to bring inflation into single digits.

In recent years, the government has tried to freeze prices for corn meal, bread, cooking oil, meat, school fees and transport costs with little success. Socialist-style controls have driven a thriving black market in scarce commodities.

Sugar, unavailable in regular stores for weeks, fetches at least 10 times the government's designated price at a dirty market in Harare's impoverished western township of Mbare.

Minibus drivers, the country's main commuter transport, routinely ignore government directives on fares, citing soaring black market prices for gasoline. Commuters questioned at police roadblocks often lie about the fare they paid or risk being thrown off the bus and left stranded.

The independent Confederation of Zimbabwe Industries estimates most factories across the country are running at around 30 percent capacity or less, and countless businesses have shut down, fueling record unemployment of about 80 percent.

Many consumer items have disappeared altogether, forcing supermarkets to fill out their shelves with empty packaging behind the few goods on display.

The worst economic crisis since independence in 1980 is blamed on corruption, mismanagement and the often-violent seizures of thousands of white-owned commercial farms since 2000 that disrupted the agriculture-based economy.

Increases in the price of fuel, transportation, vegetables and meat contributed to April's surge in the consumer price index, which was double the increase in March of 50.3 percent, the Central Statistical Office said, according to The Herald.

The international benchmark for hyperinflation is a 50 percent monthly increase.

The government warned Wednesday that the price of bread is likely to rise because only a fraction of the normal wheat crop has been planted.

In Zimbabwe's bizarre economic meltdown, a regular can of locally made baked beans in a supermarket now costs three times the price of the equivalent in Europe, compared at the official exchange rate of
15,000 Zimbabwean dollars to the U.S. dollar.

The Reserve Bank last year introduced sweeping currency reforms knocking off the final three digits - thus 250,000 Zimbabwean dollars became 250 Zimbabwean dollars - in a vain attempt to tame inflation.

Even so, consumers are still forced to carry around huge bricks of notes to pay for scarce supplies and basic services.

For example, a pest control service on Wednesday charged 1 million Zimbabwean dollars to a homeowner whose house was plagued by rats that are thriving as the country's sanitation and garbage collection collapses.

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