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Inflation gallops ahead - 9 000 000 percent
The Independent (Zimbabwe)
June 27, 2008

View article on the Zimbabwe Independent website

President Robert Mugabe's election run-off campaign premised on providing goods and services at cheaper prices has failed as inflation continues to gallop ahead. The Movement for Democratic Change presidential candidate Morgan Tsvangirai officially pulled out of today's election this week to effectively hand Mugabe a "victory". The problem is that after his "win" Mugabe will face the same problems that his government has failed to solve for the past eight years. Latest figures from the Central Statistical Offices (CSO) show that annual inflation rose by 7 336 000 percentage points to 9 030 000% by June 20 and is set to end the month at well above 10 500 000%. Inflation for May stood at 1 694 000% by May 23 according to weekly CSO computations seen by the businessdigest. Month-on-month inflation for the same period was 862% as commodities continued to rise beyond the reach of many Zimbabweans whose incomes are being eroded on a daily basis. The computation seen by this paper this week showed that inflation for the CSO calendar month which ran from May 16 to June 15 had been 5 500 000% while the month on month inflation rate had been 540%.

The CSO has been computing weekly movement averages on the annual inflation rate since mid April. This is in addition to monthly computations done according to its calendar year. The latest figure is not far from computations made by banks which have placed annual inflation for June at between 8 000 000% and 9 500 000%. CSO acting director Moffat Nyoni would not confirm this month's latest inflation figures saying his office did not have sufficient observations to give a definite inflation estimate. Nyoni said his office had done some investigations but had no official figure for May and June. "We do not have any figures for those two periods," Nyoni said. "Our observations are still not adequate for us to give a definite inflation figure." The CSO last announced inflation figures in January this year when inflation was 100 580%. Since then, figures have found their way into the open through CSO sources with figures for February and March standing at 165 000% and 355 000% respectively. The inflation rate for April was 732 604%. The failure by the CSO to announce inflation figures has affected quoted companies on the Zimbabwe Stock Exchange (ZSE) whose financial years ended between February and March. Under ZSE regulations, these companies are supposed to release inflation-adjusted results within three months of year-end but have failed to do so owing to the lack of official inflation figures. The ZSE has been forced to make special dispensations for these companies rather than suspending them from trading. The new inflation figures for this month also beat forecasts for June made by the CSO and banks last month.

businessdigest was informed last month that the CSO was looking at an annual inflation rate of between 4 000 000% and 5 000 000% for June while most banks projected rates of between 2 000 000% and 3 000 000%. For its part the CSO is arguing it cannot release the inflation figures because there are no products to measure. The latest inflation figures came as the Zimbabwean dollar continued to crash against major currencies. The Zimbabwean dollar was this week trading at US$1:$17 billion on the parallel market. On electronic transfers the rate was as high as US$1:$45 billion depending on volumes. Analysts said the Zimbabwean dollar is going to continue weakening. For instance a teacher who is paid $66 billion a month can only afford to buy two litres of cooking oil and a bar of soap. Pressure is also mounting on workers as they are now being forced to pay rentals in foreign currency. A room in Tynward was this week going for R150 a month as people battle to hedge against inflation. The average worker in Zimbabwe gets about $25 billion a month. Most workers have however resorted to joining the informal sector to keep up with the cost of living.

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