Back to Index

Economists say CSO inflation figures raise doubts
Jennifer Dube, The Standard (Zimbabwe)
September 23, 2007

THE recent inflation figures released by the Central Statistical Office merely reflect suppressed inflation, not an improvement in the economy, economists said last week.

In separate interviews, they said the decline in the annual inflation rate announced by the CSO last week was not worth celebrating as it was merely a result of the unrealistic prices imposed by the government through its price controls.

The CSO last week reported that monthly inflation figures for August dropped by 19.8 percentage points to a "two-year low" of 11.8% while annual inflation slowed from a July peak of 7 634.8% to 6 592. 8%.

"I do not believe that," an independent economist John Robertson said. "Their calculations were based on assumptions and not the real prices prevailing on the black market.

"We cannot take the figures seriously, considering there were very few goods on the official market at the time of their compilation. People relied heavily on the black market where prices of goods are much higher than the assumed prices they (CSO) used."

Others said the slowdown was artificial as the CSO merely used government gazetted prices, ignoring the fact that the month was characterised by a chronic shortage of goods, most of them components of the list used in calculating inflation figures.

The CSO list consists of such commodities as sugar, cooking oil, soap and beef. Recently, most supermarkets and retail shops have had a severe shortage of these items.

On the black market, where they are readily available, such goods normally fetch a price two or three times higher than the official one.

The economists said price controls merely suppressed inflation.

It was hopeless, they said, to try and alleviate inflation through the imposition of price controls in an economy hit by shortages. Such drastic measures tended to push people out of the formal market, pushing up prices and raising the inflation rate.

"Suppressed inflation is not genuine inflation," said Kingdom's Witness Chinyama. "If there were no shortages, we would see inflation coming down.

"If supermarkets were well-stocked and goods were available, we would see it coming down."

For a long time now, CSO figures have been dogged by controversy, with some independent analysts placing their inflation figures invariably higher than those of the government agency.

Please credit www.kubatana.net if you make use of material from this website. This work is licensed under a Creative Commons License unless stated otherwise.

TOP