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Zimbabwe inflation exceeds 66,000%
Tony Hawkins, The Financial Times
February 14, 2008

http://www.ft.com/cms/s/0/cc641c6a-db20-11dc-9fdd-0000779fd2ac.html?nclick_check=1

Consumer prices in Zimbabwe rose 240 percent in the month of December, taking year-on-year inflation to a new record of annual 66,212 per cent, up from less than 1100 percent a year earlier.

The figures provide stark confirmation of the complete failure of the government's price roll-back policy imposed in June. When the draconian price controls were imposed annual inflation was 7,250 per cent and the monthly rate was 86 per cent, but by year-end the annual rate had surged nearly tenfold.

For ordinary Zimbabweans this means that a litre of milk now costs Z$5m, up from Z$2m one week ago, while a loaf of bread now costs Z$4.5m up from z$3.5m a week ago.

Publication of the figures comes just six weeks before crucial elections in which President Robert Mugabe and his ruling Zanu-PF party are facing serious challenges both from within Zanu and from the opposition Movement for Democratic Change, and comes as a hammer blow for the government.

In the last two weeks the government has promised to flood the shops with "affordable" foodstuffs, starting this week with cooking oil, sugar and the staple, mealie meal. It has also promised to open 'People's Stores' over the next few weeks, ahead of the elections, that will sell basic essentials at controlled prices.

While some supermarkets have shelves full of imported items, including fresh fruit and vegetables, because wages and salaries are not keeping pace with inflation these are beyond the pocket of middle-class families, let alone low income groups. Increasingly employers are being forced to pay workers in kind, with food baskets rather than cash.

Many - probably most - families can no longer afford to eat meat more than once a week, if at all. All milk products and fruit have become luxuries, while few shops stock locally-manufactured breakfast cereals, displaying only products imported from South Africa.

Anecdotal evidence suggests that the pace of inflation is accelerating. Some economists predict that in February the estimated annual inflation figure will come in at around 120,000 per cent, and could reaching 150,000 per cent before Zimbabweans go to the polls on March 29.

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